FOOL'S EYE VIEW
Bloodbath at Old Folks' Home!

By Alan Oscroft
July 5, 2001

Liverpool -- You know what they're like, those formula horror movies. You're sitting there watching Scary Poltergeist Nightmare at Last Summer's Slumber Party Chainsaw Massacre IXX, and the same old story starts to unfold. There's a bunch of teenagers in a big house/summer camp/film studio (delete as applicable). And there's a nutter with an axe/chainsaw/sharp knife/pointed stick (ditto), who doesn't much like them.

One by one they start getting butchered in Hollywood tomato ketchup gore fashion. And what do they do? Do they all run away? Do they call the police and then head home to their moms and pops to watch the telly? No, here's what they do: Nothing. Nothing other than aimlessly going about whatever it was they were previously doing, hoping the bad guy with the axe will go away.

Sounds a bit like long-term financial planning, don't you think? What, you don't quite see the similarity? OK, bear with me.

Financial Nightmare

I talk to friends about their long term finances sometimes (not that often, mind, because I don't want my popularity to sink to the level of an Amway salesman). If I ever ask what they're going to live on when they stop working, the subject tends to get changed (usually to tell me it's my round).

Then it strikes me. It's as though I'm at the cinema watching "Inadequate Pension Massacre, part Fourteen Million". Poverty in retirement has taken the place of the axe-wielding  homicidal maniac, and the victims are still doing exactly the same thing about it: Nothing. And as sure as the Pope's a Polish bloke with a big hat, every last one of them is going to wind up with £92.15 a week (the Minimum Income Guarantee) embedded in the back of their skull before the closing credits roll.

Why Don't We Do Something?

It isn't simply because we don't know there's a problem. Many of us do. It's just our species' ability to avoid looking forward more than a few days or weeks that prevents many of us from walking off the set and looking for a better script.

The Motley Fool is all about independence, individual freedom, and personal responsibility. But whether we like it or not, many people find that responsibility tough going and are not sufficiently confident that they can sort things out for themselves.

That's not so surprising, really, after the financial services industry has done so much for so long to convince us that we're too stupid to make our own financial decisions and that we should pay through the nose to have someone else decide for us.

So what is to be done?

The Institute's Report

Based on a report ("In Place of Micawber: Empowering Financial Consumers") commissioned in response to the growing pensions crisis, the Institute of Actuaries has suggested that employers should offer employees a regular financial "wealth check" as part of their employment contract.

Many employers offer health insurance as part of their job packages, and that often encompasses regular health checks. Such a scheme is beneficial to both parties -- employees enjoy better health monitoring than they'd arrange for themselves, and firms get healthier (and, hopefully, happier and more efficient) workers.

The mooted wealth check would work in the same way, and should offer similar benefits. Employees who get regular help with their long-term financial planning should avoid the stress of uncertainty, and that should again lead to more efficient working.

Wake Up!

This wake-up call is sorely needed. In the words of Sir John Banham, chairman of Kingfisher and chairman of the report inquiry, "British society is, in effect, sleepwalking into a financial future for which it is ill prepared."

We should heed the call, or our chances of retiring comfortably will be similar to the usual horror movie survival rate. Wonder what's on at the pictures this weekend?

More: The Institute of Actuaries press release.
The Motley Fool Pensions Centre.