‘Portfolio career’ revolution will never reach the masses

The only change to most people’s working habits is that they will toil further into old age, thanks to the shambolic pensions industry.

In this my 50th year, I have naturally revised my earlier views of the attractions of older employees and their contribution to the economy. When I was half this age, I thought anyone over the age of 50 was hanging on to a job that rightfully should be performed by a younger, more vibrant mind. These oldies were slow-witted, had poor standards of personal hygiene and, anyway, were nearly dead – so it was as well that they went off to drink half-pints in the bay-windows of pubs in provincial market towns and talked about artificial hip-joints.

I now accept unreservedly that people in their 50s and beyond are of unparalleled business experience, with vision and maturity of judgement and, as such, are an indispensable asset of the British economy. Happily, it appears that my opportunity to make this point will not be confined to the snug bar of the Crown and Ferret at regular half-hour intervals to people who stopped listening several years ago. The ageing of a numerically very large generation, which the Government and the pensions industry can’t afford to support, has led to the widespread assumption that we’re all fighting fit and raring to work well into retirement age, before surrendering ourselves to some ecological burial site when the time comes to move on.

OK, that last bit might be a bit of an exaggeration, but the expectation is that the working population will pay for itself as it ages by, well, working. The latest symptom of this is the Government’s U-turn on redundancy payouts for the over-65s – the Department of Trade and Industry has just ruled that workers over retirement age will henceforth be entitled to redundancy payments. Until now, the assumption presumably has been that they don’t really need the money and would only spend it on Sanatogen and the Donkey Sanctuary. The new deal is meant to encourage us to work longer, in the hope that we’ll get the kind of pay-offs to which younger workers are entitled.

One issue is who will pay for these benefits. The Government is fairly stuffed when it comes to statutory pension provision and British industry is highly suspicious that any generous new state benefits will have to be funded by industry. The Confederation of British Industry (CBI) is holding its fire until it’s seen the shape of age-discrimination laws due next year. And industry is feeling fairly smug, anyway, since it won a key triumph in December in retaining the right to retire workers at 65.

Separately, the CBI has opposed the concept of a universal “citizens’ pension”, predicated on the principle of residence rather than National Insurance contributions, as “unaffordable”. Frankly, we’d be willing to take the CBI’s line a bit more seriously if British industry hadn’t taken extensive pension-contribution “holidays” during the boom years and now found that it can’t afford to meet its pension obligations since the equities markets have failed to deliver.

But the real issue is why the characteristics of working life haven’t changed over the past decade or so. Back in the mid-Nineties, we were assured that the entire profile of working was about to change, not least because of the impending revolution in information technology. The climate of the times was captured by one of those corporate prophets, Charles Handy, in his book The Empty Raincoat: Making Sense of the Future, which is worth a re-read for demonstrating how quickly things, as it were, don’t come to pass.

We were meant to be moving into an age of pluralism, in which we would no longer work for large, discrete organisations, but would operate a portfolio of activities. A decade on, we are resolutely still in the embrace of the large corporation model and single sources of employment. The former Asda wunderkind, Allan Leighton, was, if memory serves, photographed around this time astride a motorcycle talking about “going plural”. Since then, he has determinedly developed the portfolio approach, assuming leadership roles as diverse as Royal Mail and Selfridges.

But there is an important and obvious point to make here: Leighton is very rich, relative to the general working population, and is arguably more than averagely talented. He is part of a small and highly privileged minority that can afford, in every sense, to run a pluralistic portfolio. And this leads to a further very relevant point: the savings markets aren’t geared to the retirement requirements of the overwhelming majority of the population. Though it denies it, the financial services industry serves the exclusive interests of the relatively affluent.

Until the Government makes it sufficiently attractive commercially for this industry to serve the broader population – and until companies recognise the scale of their responsibility for care – our prospects, at any age, can only deteriorate.

George Pitcher is a partner at communications management consultancy Luther Pendragon


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