Ms Jacqueline Thornton:

I will pick up on one of those points, which was exactly the point I was discussing earlier with Deputy Kerrane. I agree that the whole point of auto-enrolment is to leverage inertia. We would not expect a huge amount of interaction and requirement, let us say, but there will be certain points throughout an individual's life where they are going to have additional moneys available and they need to understand where is the best place to put that. Again, we cannot overestimate the importance of financial advice and being with a financial broker because that will help people to understand that they have the money for the shoes but they also have this money over here, and they could do both.

As part of the discussion with the Chairman, we were talking about the need for financial literacy training. This is difficult. Pensions are complicated and that impacts on the engagement. I am a former independent financial adviser who advised on pensions and I would have that exact conversation with a client about saving for retirement. However, what I would usually get was: “I will be dead by then so I do not need to worry about it.” Then, suddenly, people are at 66 and they need to worry about it but it is a bit late. It is very important to try to get a level of engagement. Yes, it is very difficult because it is complicated environment to be in but, at some point during that life cycle, as people go through the auto-enrolment system, they need to think about how to increase the adequacy of their pension in retirement – it is for you, not a cohort, but you need to have that consideration, and the auto-enrolment system should allow you to do that.

What we have discussed here today is that, as it is currently drafted, there is not that support to allow people to increase the adequacy of their pension in retirement. However, having been in the auto-enrolment scheme passively for a number of years and getting their annual statement, at least they will kind of understand what they have there, and hopefully people will have a reasonable expectation of what they are going to get in retirement, although, as we have discussed, we do not know how they are going to get it. Regardless of whether it is the State scheme or a private scheme, they will have to get an annual statement every year which will tell them how much is in their pension and, theoretically, how much it is going to be at retirement should a set of economic assumptions be met. The hope is that when people start out passively in auto-enrolment, they become more engaged because they can see it, they can see their money growing and they can see their projected income in retirement growing. The hope is that, at that point, they start becoming more engaged.