With less than a week until the 2015 general election the debate is certainly hotting up across the media.
The various parties have been firing policy-bashing shots at each other for weeks now and are promising the voters ever more attractive deals should they be elected into power.
It’s important to try and drown out a lot of this noise and really focus in on what matters to this country. I’ll be voting for the party which truly addresses the problems that we see affecting our customers every day.
1. Listen to the people of this country and be honest about the challenges we’re facing
It’s only by confronting the barriers that have been holding us back, rather than hiding behind manipulated statistics and figures, that we’ll truly thrive as a country.
Here at Nutmeg, we surveyed our customers on their opinions leading up to the general election and for more than half who responded (53%), the state of their own financial circumstances, as well as the state of the economy, are the most important considerations when it comes to casting their vote.
What’s more, we found that 91% say they are driven by policies rather than politicians’ personalities. That’s why it’s essential that the parties have strong and convincing policies in place, particularly when it comes to the financial empowerment of consumers.
2. Increase transparency in financial services
Opaque and hidden fees are having a devastating effect on people’s life savings and it’s something they’re often not aware of until it’s too late.
The European directive MIFID II rules that by 4th January 2017 all investment and fund managers must display the total charges levied on customers. Firstly, why not seize the initiative now and make the rules compulsory from 2016 in the UK, putting us ahead of the pack? Transparency will go a long way to helping people understand the outcomes of pension saving.
And secondly, cap fees for investment products. Fees are clearly a crucial component of investment returns, in terms of both accumulation as well as drawing income. Even small increments can have a huge effect over time and so it’s really important that the industry steps up and takes action.
3. Simplify the pensions system
A good government will encourage and empower people to save whatever they can from an early age and make it attractive for everyone (not just the well-off) to do so.
Firstly, they could start to tackle this problem by basing the pension cap on contributions rather than overall size of the pot.
Secondly, they should increase employer pension contributions to 10% by 2020 without exception.
This would certainly help people in the UK put money aside for their later life and help them understand investing. So many more of us are living longer than ever before, and we’re very lucky that is the case. But it all has to be paid for and right now we’re walking straight into a pensions crisis.
The financial health of this country rests on each and every one of us to take responsibility for our own future, with a government that supports us in doing that. I believe that everybody should be empowered to save and invest, if given the tools to do so and a government committed to the long-term future of this country.
Risk warning
As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. A pension may not be right for everyone and tax rules may change in the future. If you are unsure if a pension is right for you, please seek financial advice.
Source: Nutmeg online customer poll (17th-20th April 2015), data based on 642 respondents.
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Nick Hungerford
Nick is one of Nutmeg's co-founders, and is now a non-executive director on our board. He holds an MBA from Stanford University. His industry and investment views are respected globally and he frequently appears on television and in the national media. Nick can be found tweeting @NickHungerford.Other posts by Nick Hungerford