Big picture thinking towards sustainable savings

The Future Prosperity Panel 2011 or é C a rl H on Pa we l Sw ie bo da Simon Tay fo r A nn P e t ti D ia n e C o y le Big picture thinking – towards sustainable savings Mat the w Ta ylor rk B ij a p u R ama ar Ja ne Fu lle r An Aviva report, with analysis and editing by the Economist Intelligence Unit to n A la in de B ot About Aviva Aviva is the world’s sixth-largest insurance group We provide more than 53 million customers with insurance, savings and investment products We are the UK’s largest insurer and one of Europe’s leading providers of life and general insurance We’re here to help secure prosperity and peace of mind for our customers We help protect almost every aspect of people’s lives; their homes, cars, families, health and their financial futures For over 300 years, we’ve helped people protect what they have today and to plan, invest and save for their futures Everyone in our business understands the difference they can make to people’s lives, particularly in times of need Our Customers: For us, insurance is about people, not policies That means responding to our customers with thought, care and understanding We want people to choose us and stay with Aviva throughout their lives because they know we’ll be there for them – and they like dealing with us Our Business: Our business helps our customers to manage the risks of everyday life and protects them long into the future We must be there for them throughout their lives and beyond, so it’s crucial we are a sustainable and profitable business, for the mutual benefit of our customers and our shareholders Our People: We’re determined to stand apart from other financial services companies We’ll only achieve this if our people are proud to work for Aviva, so we listen to them, respect them and recognise the personal contribution they make to our business Society: We want to encourage more people to secure their financial futures We’re committed to working with our customers, governments, regulators, charity partners and business partners to find solutions that increase the financial well-being of both individuals and society More information is available at www.aviva.com, or follow us on www.twitter.com/avivaplc About this report The Economist Intelligence Unit organised the meeting of the Future Prosperity Panel, and commissioned and edited the essays written by the panellists It also wrote the preface, The Savings Health of Nations, the closing comments and Building a New Social Contract, which is based on a survey conducted by the Economist Intelligence Unit About the Future Prosperity Panel In order to address the long-term savings challenges outlined in this report, the Economist Intelligence Unit, on behalf of Aviva, convened a panel of international thinkers to use insights from public policy, business and behavioural economics to consider new approaches to improve prosperity around the world – the Future Prosperity Panel (FPP) About the Economist Intelligence Unit The Economist Intelligence Unit (EIU) is the world’s leading resource for economic and business research, forecasting and analysis It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe, inspiring business leaders to act with confidence since 1946 EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services The company also undertakes bespoke research and analysis projects on individual markets and business sectors More information is available at www.eiu.com and www.businessresearch.eiu.com, or follow us on www.twitter.com/theeiu Introduction: 02 Foreword by Andrew Moss, CEO of Aviva 06 Preface by the Economist Intelligence Unit 08 The savings health of nations by Robin Bew, editorial director and chief economist of the Economist Intelligence Unit Rebranding saving How the financial services industry can help savers better connect with their money Page 12 Play to win Gaming holds the key to changing savings behaviour Page 18 Pensions, their portability and prosperity Pension transferability is key to labour mobility, which benefits the European economy and individual prosperity Page 42 How the financial services industry can rebuild trust and get people saving again by reducing complexity and information overload Page 30 Creating a new savings paradigm for emerging markets Financial services companies need to adapt strategies and products for new emerging market consumers Page 36 Asia’s rebalancing and the implications for future prosperity Why Asia must put its savings to more productive uses and focus on inclusive growth Page 48 Savings and the alchemy of credit Savings may make sense at the individual level, government savings are not a precondition for investment – and prosperity Page 54 Fostering a new culture of saving Invention of bank money and the development of banking systems Page 60 Analysis and conclusion Current attitudes towards savings can be changed and reconnected to positive traits such as generosity Page 24 Saving made simple Guest essays Making the connection: empowering savers Introduction Guest essays 01 Analysis and conclusion: 66 Building a new social contract: views from the business world by the Economist Intelligence Unit 71 Closing comments by the Economist Intelligence Unit 74 The Future Prosperity Panel overview 02 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 Foreword by Andrew Moss, Group Chief Executive, Aviva 03 Introduction Guest essays Analysis and conclusion 04 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 Foreword by Andrew Moss, Group Chief Executive, Aviva When we decided to prompt a debate on future prosperity we knew we were taking on a big topic One which touches on everything from the household budget to the big macroeconomic challenges of our age This debate comes at a time when the world economy has weathered a series of major shocks that have shaken it to the core Trust in the financial sector has suffered a major blow "We all ne ed this de bate to happe n now and bring to be ar many voice s and pe rspe ctive s if we're to find the answe rs to the challe nge of our future prospe rity." But the significant trends are still clear In many developing markets, economic growth continues to accelerate, helping to deliver major improvements in living conditions for millions of people Consider, for instance, that by 2030 an estimated two billion people will have joined the ranks of the global middle class, with the majority in emerging markets And people are living longer Demographic shifts and improvements in healthcare mean that global life expectancy rates have increased by four years since 1990 Government liabilities are mushrooming as an elderly population is increasingly reliant for support on a smaller workforce But much of the evidence we see suggests people are not preparing enough for the future Our ‘Consumer Attitudes to Savings’ research across ten of our major markets finds that six in ten consumers are worried they won’t have enough money when they retire to provide an adequate standard of living.1 Our ‘Mind the Gap’ report last year found that the gap between the income people hope to have in retirement and what they’re actually saving totals €1.9 trillion a year across Europe Four in ten people near retirement age today are now planning to work beyond the normal retirement age in order to properly fund their retirement.2 For a business like ours, whose purpose is to provide its customers with prosperity and peace of mind, there is a role in helping understand these consumer needs and seeking new ways to meet them Helping people manage their financial futures effectively requires understanding how, why and when they save Few other issues have such profound global implications in the way they link macroeconomic and political debates, culture and psychology, local and global economic imbalances It is for this reason that we brought together nine prominent thinkers from a range of backgrounds to take part in our Future Prosperity Panel It was a real pleasure to take part in the discussions and we’re now proud to be publishing their essays which bring to bear their considerable experience in public policy, business and behavioural economics Contained in these, there is fresh thinking and a wide range of views Indeed there is plenty of disagreement between them But that’s precisely the point We all need this debate to happen now and hear from many voices and perspectives if we’re to find answers to the challenge of our future prosperity Therefore, perhaps it is no surprise that the thinkers identify roles for governments, individuals and industry 58% – Aviva consumer attitudes to savings survey February 2011 Join the debate www.aviva.com/fpp 38% – Aviva consumer attitudes to savings survey February 2011 05 I believe this is key Whether it’s the written information we send, the content that sits on our websites or the support they receive when they call us – we want it to be as clear and helpful to people as possible Regulators can help by looking at the information they require companies to provide to customers, to make sure it’s specific and useful and not so burdensome that people cannot see the wood for the trees We are seeking to make our website a ‘go to’ source of online guidance for people making their financial decisions – whether they choose to become Aviva customers or not We will launch an innovative online tool that helps customers understand their current financial situation, the financial implications of life events such as starting a family or paying school fees, and shows them how they can realise their wants and dreams Next, we want to work in close partnership with governments around the world to help people get the information they need This is why we have been campaigning for the introduction of annual pensions statements – bringing together people’s forecasted retirement income from state, occupational and private pensions, all in one place If people can see where they stand, they can better plan for the future Savings are about aspiration; we should talk more about the positive things people are saving for in their own lives And I believe we can more to kick start the savings habit in people from a young age and get people to keep the habit over a lifetime In doing this, there might well be scope for making use of new approaches like the characteristics of gaming to make saving feel more interactive, compelling and – dare I say it – even fun In small tangible ways, we need to ask ourselves can we design the products that nudge people towards better providing for their own future prosperity? There are exciting provocations in these essays that we will explore further in the coming months as we progress these priority areas For us, this is not the end of the debate It’s the beginning Taking on the big challenges in sustainable savings and providing for prosperity in the future is a task for everyone – no one single player can affect the necessary change That’s why we’re looking to the industry and investors, our competitors and regulators, our customers and our staff, to join us in this big debate and help take things forward We hope this series of essays will provoke new ideas and actions, and that you enjoy reading them Andrew Moss Group Chief Executive, Aviva Analysis and conclusion We’re also seeking transparency and choice so people get a good deal For example, we’re campaigning in the UK for the annuities market to be thrown wide open and companies forced to publish their rates so people can see where the best deals are to get the most for the money they’ve saved over their lifetime First, help people better understand the financial choices they need to make Secondly, we must strive to change people’s relationships to saving Guest essays And we make our products responsive to different needs in different parts of the world In Sri Lanka, we have developed a microinsurance product to extend the benefits of life insurance to tea plantation workers for the first time In India we have developed a child plan product that allows parents to insure and invest to help secure their child’s education In the UK, we’re developing our products and services to respond to the introduction of automatic enrolment for pensions, built on the behavioural habits and communication preferences of today’s consumers But I believe there is clearly far more to to meet this challenge At the heart of it is trying to provide what customers want and need There are two broad areas covered by the thinkers in particular that I intend to focus on: Introduction As a global business, we are well positioned to build on some of the thinking here Indeed, many things we are doing already We support financial education in many countries, which is something many of the panellists raise For example, our UK ‘Paying for it’ initiative provides a free educational resource in schools to bring the citizenship curriculum alive for 14 to 18 year olds Aviva works in partnership with the Citizenship Foundation charity to deliver these practical lessons using our staff as volunteers 06 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 Preface by the Economist Intelligence Unit Big picture thinking – towards sustainable savings is an Aviva report edited by the Economist Intelligence Unit The report is the culmination of a research programme begun in 2010 to explore the role of savings in financial prosperity Our prosperity depends on how we save, when we save and why we save More than any other issue, the world of savings links the big macroeconomic and political debates of our time with the specific and everyday concerns of individuals and companies It links high politics with culture and psychology; local markets with global economic imbalances It affects our livelihoods, our political debate and the development of society worldwide It is these reasons that make saving such an important subject for research, but evaluating all the associated issues is a significant challenge The Economist Intelligence Unit’s chief economist and editorial director, Robin Bew, outlines a number of important aspects of savings and prosperity and argues that two key issues currently stand out: global imbalances, and retirement provision in an age where so many countries are home to a dramatically ageing population His article, ‘The savings health of nations’, follows this preface To advance the latest thinking in this vitally important area and better understand the challenges and opportunities in supporting saving and prosperity globally, we enlisted the help of nine thinkers to form the Future Prosperity Panel Drawn from a range of disciplines, representing a variety of global perspectives, the nine panel members met at an event in London in October 2010, hosted by Aviva CEO Andrew Moss and chaired by The Economist’s capital markets editor Philip Coggan The Future Prosperity Panel considered the roles of individuals, business and policymakers as they sought answers to the questions: Why some save more than others? What are the consequences of their decisions? And how can we change? After the initial debate, the thinkers were challenged to drill deeper into their areas of expertise to work towards solutions Using insights from public policy, business and behavioural economics, they considered new approaches to improving prosperity and promoting responsible saving Essays detailing their proposed solutions form the bulk of this report, but here is an overview of their main suggestions: • Jane Fuller, co-director of the Centre for the Study of Financial Innovation – empower savers and bring them closer to their money through ‘do it yourself’ saving options; incentivise savers by connecting investments with causes they believe in • Carl Honoré, journalist and author – put the fun into finance by translating the qualities of gaming – interactivity, virality, instant gratification and competition – to product development 07 • Rama Bijapurkar, consumer behaviour expert and author – create financial products suitable for emerging markets; remodel independent financial planning and rethink individuals’ financial risk more holistically • Simon Tay, chairman of the Singapore Institute of International Affairs – nurture Asia’s emerging middle class with policies of inclusive growth; harness savings to develop infrastructure and increase investment in human capital • Ann Pettifor, executive director of Advocacy International – enable central bankers to regulate credit creation and set lending rates; support savers in making economically productive investments with higher rates of return; reconnect the financial system with the real economy Analysis and conclusion ´ • Paweł Swieboda, president of demosEUROPA – simplify and improve the pension system at an EU-level to boost portability and improve transferability and transparency And to gain an additional perspective on the issues, a survey of the Economist Intelligence Unit’s Opinion Leaders’ Panel explored the business world’s view of what is the right balance between policymakers, corporates and individuals in supporting savings Over 800 business leaders from around the world gave their views, which are analysed in the article ‘Building a new social contract’ towards the end of this report Guest essays • Diane Coyle, economist, Enlightenment Economics – create simple savings products with clear information, which prioritise customers’ long-term security; boost financial literacy; simplify regulation • Matthew Taylor, chief executive of the Royal Society for the Encouragement of Arts, Manufacturers and Commerce – foster a new culture of saving by redirecting tax incentives to the less well-off; explore ways of increasing savings returns and bringing down fees; and get children into the savings habit early with school-based accounts Introduction • Alain de Botton, philosopher and author – rebrand savings by using advertising to reconnect it to its social benefits and lose its associations with meanness 08 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 The savings health of nations By Robin Bew, editorial director and chief economist, the Economist Intelligence Unit Evaluating all the issues associated with economic health and saving around the world is a mammoth task, but two key issues currently stand out: global imbalances and retirement provision in an age where so many countries are home to a dramatically ageing population On both counts, the scale of the challenge is daunting Governments appear unwilling to tackle these problems at the root and are storing up trouble for the future There is time to make the necessary changes, but policymakers need to start taking action now if they are to avoid serious problems further down the road Global economic imbalances Trade imbalances are a normal part of economic life Across the world, trade deficits are offset by trade surpluses in other countries, and for individual countries running a small surplus or deficit is normal Large deficits can become difficult to finance and can ultimately lead to crises for the affected country, but in general most countries trade imbalances are perfectly sustainable However, in recent decades the average trade imbalance has become larger According to EIU CountryData, during the 1980s the total of all current account imbalances around the world (the absolute sum of all deficits and surpluses) averaged about 2.4% of global GDP per year In the 1990s the average was 2.3% But in the most recent decade it had risen to 4.5% of global GDP The global financial crisis has in large part been blamed on this phenomenon If that assessment is correct, trade imbalances will need to become smaller in the coming decade, or further crises loom What are the chances of the world learning from its recent mistakes? To understand whether lessons have been learned, we first need to explore why the rise in trade imbalances occurred in the first place The way the economy is ‘supposed’ to work Current account deficits can be explained, at least in part, by the flow of savings across the world The traditional view is that savings should flow from the developed world to the emerging In developed countries, incomes are high and the private sector is able to save Some of those savings are invested locally, funding infrastructure spending, business investment, and government investment in schools and hospitals But in developed countries that already have a substantial capital stock, some of the spare money will instead flow to places where it can be put to better use – the emerging world There, incomes are low and savings therefore limited But the need for investment is high – infrastructure is less developed, and the stock of existing business investment is low and of poor quality Savings from the developed world fill the gap, allowing investment in emerging countries to outpace investment that could be funded from local savings And a lot of that investment would take the form of machinery and equipment, which would be imported from the developed countries So a textbook pattern for global trade and capital flows would be savings flowing from the developed world into the emerging markets, fuelling investment, and the emerging world running a trade deficit because their imports of plant and equipment are offset by trade surpluses being run in the developed world 66 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 Building a new social contract: views from the business world by the Economist Intelligence Unit In order to get the views of business leaders on the role they expect the private sector, as well as individuals and the state, to play in promoting personal prosperity, the editorial team at the Economist Intelligence Unit conducted a survey of senior executives around the world The survey results were then supplemented with in-depth interviews to better understand what companies are already doing to help their employees save and what they are willing to do in the future After the financial shock of 2008, the Western world is rediscovering the virtues of saving as the key to the door of personal prosperity Whether you live in Seattle or Soweto, savings help guard against financial insecurity; unlock barriers to corporate and government investment; and help secure the economic health of a nation and its citizens World leaders, at successive G20 meetings, have called for reforms to promote higher national savings in the mainly Western countries that had enjoyed, then suffered from, a borrowing binge At the same time, they have also urged reforms to create or strengthen social safety nets in emerging markets such as China and India, which would allow citizens of those countries to reduce their savings This dual approach recognises that there has been a global imbalance of savings and that there is not a one-size-fits-all solution to getting savings right Policymakers are intent upon fostering a more balanced global economy and central to that goal is the creation of a sustained savings culture In mature economies, such as the US and UK, this is considered vital for ensuring no repeat of the self-defeating spending and credit boom In developing countries, it is required to nurture a shift towards more formal financial services and longer-term retirement planning This is especially vital for the world’s poorest people, the approximately two billion with no access to financial services and little or no hope of financial security Such access is, as the World Savings Banks Institute (WSBI) has put it, “a key condition for helping to break the chain of poverty” and achieving greater economic growth At the same time, it is clear that a sustained savings culture depends on a new deal between the individual, the individual’s employer and the state – certainly in the West and within the strongly emerging economies Demographic changes are putting greater responsibility on people to plan for their own futures but employers and governments still have key roles to play Employers see more comprehensive benefits packages, including saving schemes, as crucial for recruitment and retention And governments, while facing multi-billion liabilities in state pension schemes, are being enjoined to offer a wider range of tax and other incentives to encourage saving 67 There is overwhelming support (74%) worldwide for the notion that financial prosperity means financial security in old age and a better lifestyle for individuals and their families Half of respondents say that savings enable people to invest for the future – in funding the education of their children, for example This, according to Nitin Sahni, chief operating officer at Intelenet Global Services, an outsourcing firm, has always been the case in India where earlier generations met economic insecurity by sacrificing their own lifestyle “They had the great desire to work immensely hard and would not compromise the education their children would get,” he says The survey findings indicate an equally strong motivation to save for their children’s future in North America, Europe and the rest of the world A majority (64%) of North American respondents admit that it is more satisfying to spend and/or borrow than save Rick Stephens, senior vice-president for human resources and administration at Boeing, says there is a split feeling among people: they are pushed by the media and peer pressure to spend and borrow but, now, faced with uncertainty, most notably high unemployment, some have become more conservative in terms of watching their money “The real test will be when the economy begins to improve and jobs become more prevalent,” he says “Will people go back to their old habits and spend and raise credit – or will they save for a rainy day?” He clearly believes those old habits of seeking instant gratification will die hard That deferment of saving is particularly true of the younger generation in mature economies such as the UK, where half of those aged 25-35 are not saving for their retirement, according to the UK Department of Work and Pensions Gerd Fromm, head of private and company pension schemes at Deutsche Bank in Frankfurt, concedes that the German savings culture – in direct contrast to the US – has remained fairly constant But he adds: “There’s no great enthusiasm for saving in Germany, especially among the young, as it means renouncing consumption… It means saving for a later income in 30 to 40 years so it is seen as necessary and important… But it also means there’s a lot of work to be done by the financial services industry to make saving more accessible and attractive.” Attitudes are shifting in emerging markets as well While India’s national savings rate is currently 35%, Rajnish Kumar, regional managing director of the State Bank of India, notes a generational change Family has traditionally played a strong role in India where a savings culture is inculcated from birth However, he says: “The young are less conscious about saving, although they have more income in hand… When we grew up, incomes were lower but the propensity to save was higher Our parents saved for a rainy day… It’s a family thing – like passing on a father’s suit to his elder, then younger son and then his nephew.” Analysis and conclusion Defining prosperity But there is a long way to go Only 5% of respondents think their country saves enough and as many as 43% highlight the lack of a savings culture It is here that regional differences are most glaring Less than 1% of North American respondents think savings levels in their country are adequate – unsurprising considering the US personal savings rate went negative in 2009 and was just above 5% in 2010, according to the Commerce Department – while two-thirds (66%) believe governments should prioritise the lack of a savings culture But in Asia-Pacific those figures are 10% and 23% respectively The culture of saving Guest essays It may be too soon to talk of a new ‘social contract’ among employees, employers and governments but there is clear evidence of one emerging – and of strong support for it among business leaders There are, of course, significant regional variations, reflecting cultural and economic differences, but often there is still a surprising consensus on what is to be done Similarly, saving is seen as creating a culture of personal responsibility rather than relying on the state by 44% of respondents in all four regions Slightly fewer (38%) connect it to providing greater financial autonomy for individuals, but, again, it is a view shared equally among the regions This suggests a considerable level of support for a new kind of savings culture among respondents Introduction These themes and issues emerge strongly from the Economist Intelligence Unit survey, carried out on behalf of Aviva, of more than 800 business leaders around the world The findings underline the urgent need to create a savings culture which is both sustainable and appropriate, and the willingness of companies to more to achieve this – provided individual employees take on more responsibility and the state gives a range of incentives 68 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 Building a new social contract: views from the business world by the Economist Intelligence Unit Continued His compatriot, Hira Sadhak, recently retired chief executive of LIC Pension Fund in Mumbai, is even less sanguine: “There is an alarming and drastic decline in household savings for retirement and old-age income.” Instead, Indians save for more short-term goals such as to finance education, a daughter’s marriage, buying a house and, more recently, travel The role of the state For many developing countries, formal retirement planning and systematic saving are not yet widespread options Even so, 45% of survey respondents in the rest of the world say individuals are not taking enough responsibility for retirement savings compared with 61% in Europe – and just 32% in Asia-Pacific The state’s role is downplayed in Europe and North America compared with the other two regions, where around 60% believe it should more Mr Fromm at Deutsche Bank says that in Germany the Bismarckian model of the all-providing ‘social state’ has been under siege for the last 20 years as governments have been forced to undertake a huge number of reforms – 15 to the pension system alone – due to the country’s ageing population His bank says that by 2030 there will be 110 pensioners for every 100 contributors to the state pension fund compared with 65 pensioners now These dramatic changes have heralded a new relationship between employee, employer and government While the state used to provide up to 80% of retirement income, he says, that has now shrunk to 50% or less because successive German governments have cut the real value of state pensions and private and company schemes have filled the gap “Every citizen is obliged to look after himself,” Mr Fromm comments “If he doesn’t this privately then he’s forced to rely on basic social aid.” He adds that over three-quarters of young Germans say they not plan to rely on the state for their old-age income Mr Sadhak, now a freelance financial market consultant, says the key player in India is the state, which needs to provide comprehensive social security and an old-age income policy, notably to deal with the 64% of workers employed in the informal sector, by enforcing mandatory retirement saving As India’s population ages, he adds: “The state should initiate determined action to create and strengthen public-private partnerships to promote a long-term saving culture.” Mr Kumar and Mr Sadhak agree that extended tax incentives are crucial Among survey respondents, 55% overall cited lack of fiscal incentives as the biggest barrier to firms helping their employees to save; as many as 75% see increased tax relief for savers as a required reform Mr Fromm points out that, in this new savings landscape: “The state withdraws direct funding on the one hand and hands out more incentives on the other.” 69 The slow withdrawal of the state from providing sufficient pensions in Western countries has heightened the role played by employers But, faced with the same financial pressures and longer lives for their retirees, companies are, in turn, putting more of the onus on employees Looking to solutions Yet many business leaders, including those in emerging economies, believe their individual staff members are not saving enough More than half (54%) cite inadequate disposable income as one reason, while only 18% mention high inflation and low interest rates Almost half (48%) of respondents say a lack of financial literacy is one reason why individuals fail to save Alfred Hannig, executive director of the Alliance for Financial Inclusion, a network of policymakers and regulators in 70 developing countries, acknowledges the need for financial education The Global Partnership for Financial Inclusion, set up through the G20 and backed by philanthropic charities such as the Gates Foundation, is sponsoring efforts to double the number of savings accounts opened by the poor in 10 countries – seven of them in Africa Many of these ‘unbanked’, according to Anne-Françoise Lefevre, head of institutional relations at the WSBI, save informally by buying an animal or gold or hiding cash under the bed – very vulnerable activities The aim now is to get microfinance institutions or mobile money operators to offer a safe haven for savings, as well as access to small loans Analysis and conclusion Executives see a clear need to match this greater self-reliance amongst staff with improved financial advice and 43% of respondents believe firms should provide an annual financial ‘health-check’ Mr Stephens says 10% of the company’s 160,000 employees have taken part in free financial planning seminars The company also offers free online financial advice and, for a nominal fee, a professional account manager “As people recognise they’re responsible for their financial health and the company provides them with the toolkit to save, we’re forming a much stronger partnership and it’s good for company growth,” Mr Stephens adds But the financial services industry must play its part fully in delivering effective solutions that are tailored to the needs of individual markets Mr Hannig insists that the industry needs to enable new channels of outreach for savings among the poor, citing mobile phones and point-of-sale devices – as in the Kenyan experience with the M-Peso ‘banking beyond branches’ scheme, which enables people to transfer money via their mobile phone and has now also been extended to allow savings and buying insurance New, appropriate products such as no-frill bank accounts charging low or zero fees, are also vital Guest essays In the US, as in many other countries, these trends have propelled companies to abandon pension schemes offering defined benefits to those based upon defined contributions, shifting the burden of investment risk from employer to employee This change has driven a change in thinking about who is responsible for retirement planning and about savings in general Mr Stephens at Boeing is not even certain that, say, lack of tax incentives and other barriers to savings mooted in the survey are the main issue “It was more a culture and expectation that someone else was responsible, a sense of entitlement… It has moved from the company being responsible to a shared responsibility with the employee.” The company also offers the Voluntary Investment Plan (VIP), a pension and savings scheme that is automatic and opt-out and attracts up to 85% of employees Staff, whose own contributions are matched by Boeing (70 cents on the dollar, on average), can make changes to their defined contribution scheme online – and are issued with an annual score-card indicating their relative financial health in red, yellow and green Introduction The role of employers 70 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 Building a new social contract: views from the business world by the Economist Intelligence Unit Continued A mountain to climb Such solutions may also apply in more developed economies where it is deemed imperative to raise the savings rate Overall, two-thirds (66%) of respondents say this rate should be between 10% and 25% of net income but a quarter in Asia-Pacific say up to 35% is required – a view endorsed by Mr Kumar “Otherwise, look at Britain, I doubt if you’ll be able to have a decent retirement,” he says The financial services industry has a key role to play in fostering that savings growth, according to survey respondents, by offering simpler products (44%), making it easier to track and measure an individual’s savings (42%) and using clearer language (34%) A quarter (24%) see a role for new technologies to make it easier and quicker to save little amounts, more frequently In summary, what this survey underlines is a clear awareness among business executives that the savings landscape is changing dramatically under the impact of ageing populations, greater individual longevity and a continuing financial squeeze on state provision A lack of access to appropriate financial services and inadequate or no financial education complicates the situation This is true not just of Western economies but also in emerging markets Policymakers and practitioners need to promote and sustain this burgeoning partnership among staff, employers and government There is a mountain to climb How companies are helping employees to save: ‘Take control of your future’ is the key message on the dedicated pensions website set up by mobile phone operator Vodafone for its 8,500 UK employees “We’re helping, not encouraging, people to save,” says Libby Pritchard, Vodafone’s head of corporate responsibility and reputation The company says its saving schemes are designed to increase employee engagement, as well as offer extra remuneration Vodafone closed its defined benefit pension scheme to new joiners (in 2006) and froze it for existing staff (in 2010) in order to contain costs It now operates a defined contribution scheme This allows employees to invest from as little as 2% of their salary, matched by the company at 1.5 times up to a maximum of 7.5% It also offers free life insurance A special website allows contributors to track the value of their pension pot and make changes Staff can choose among three lifestyle plans offering different combinations of equities, cash and bonds – or 13 self-select funds provided by different investment managers The onus is on the employee to decide, with staff told self-select ‘puts you in the driving seat’ Vodafone also runs two main saving schemes linked to share purchase Staff can now apply to join the Sharesave Plan by text message, receiving confirmation by return text rather than formal letter This allows them to save up to £250 a month over three or five years, after which they can buy Vodafone shares at a discounted rate The newer Share Incentive Plan (SIP) enables employees to buy company shares from their pre-tax salary This is a ‘buy one, get one free’ scheme in that Vodafone matches – to a ceiling of £125 a month – the number of shares an individual buys They are parked in trust for at least two years and there are tax and national insurance advantages in holding onto them Vodafone also offers new ‘salary sacrifice’ schemes, which appeal to younger staff (and the company) by being fiscally cost-effective: beyond contributing to the pension scheme indirectly out of pre-tax income, employees can buy child care vouchers or even a car Ms Pritchard says the overall package helps define a company’s attractiveness as an employer She adds: “The most important thing is to make savings understandable so people can access them.” 71 • Financial products should be simple and low-cost, and how they are sold and explained should be improved They should also better connect savers with their money and always focus on what is right for the customer Without doubt, the financial services sector is critical to supporting a new culture of savings and lessons must be learned from the financial crisis of 2008 The FPP panellists expressed a range of views on where to focus and how to so, but it is clear that the industry is required to play a fuller part Rama Bijapurkar believes that financial services firms should develop country-specific strategies because the nature of each emerging market is very different She wants the industry to then create a new set of products for consumers on modest incomes – the growing middle classes who will be the mainstay of emerging market growth in financial services – such as hybrid products which are a mix of savings and borrowing ´ Looking specifically at pensions, Paweł Swieboda believes European Union countries need to simplify their existing pension systems, set up individual pension accounts, remove existing regulatory differences and harmonise prudential regulation, all of which would help connect savers with their pensions through increased transparency and ease their transferability, making them more relevant for highly mobile workers Financial services companies can help by creating cross-border funds for these workers Analysis and conclusion The members of the Future Prosperity Panel posed a number of key questions and each has laid out their particular take on what is required to effect positive change Their perspectives are given additional colour by the views of our survey respondents Although the panellists covered a wide range of issues, a number of areas of consensus emerged that are worthy of further examination Product design emerged as an important theme, with Jane Fuller arguing that financial services companies should design, and provide customers with direct access to, simple, low-cost products, as well as provide customers with clear explanations of where their money is going and what the charges are Similarly, Diane Coyle urges financial services companies to rebuild trust by changing and simplifying products and services to make customers’ long-term security the priority She also calls on the industry to end information overload and simplify product literature Guest essays We have now heard from a range of perspectives and the general consensus is that savings are a key component of individual financial prosperity and more should be done to encourage it – but at the right level and in the right way Only then will savings benefit not just the individual saver but wider society as well Introduction Closing comments by the Economist Intelligence Unit 72 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 Closing comments Continued Matthew Taylor wants the financial services industry to continue to explore ways of increasing the returns and bringing down the fees attached to various forms of savings, especially personal pensions Carl Honoré puts forward innovative ideas on how to better connect people with their savings He suggests that there is real scope to harness the competitive spirit innate in all of us, so the financial services industry should build games that spur people to outsave others, or provide a constant stream of small rewards to keep them engaged and desperate to play better Survey respondents are clearly on the same page, with large numbers identifying a need for the industry to create simpler savings products; make it easier for people to track and measure their savings; reduce complexity (for example, number of forms, small print); and use clearer language in savings product literature • Modern attitudes to savings must be changed Providing the right products and services to achieve the scale of change necessary is only half the picture In addition to tackling this supply side challenge, some significant changes will need to shape the demand side too A new discourse of saving is needed – one which fundamentally and successfully shifts what saving stands for, and which imbues it with positive, aspirational and valuable characteristics to shift behaviour The FPP panellists present a range of provoking options for achieving this paradigm shift Alain de Botton encourages the financial services industry to take inspiration from history by building up a dossier of value shifts and shifters through history and using these to inspire both internally and for PR and marketing messages The key is to dismiss the association between saving and meanness and use advertising to reconnect saving to its social benefits – showing that to save is an ultimate act of generosity Fuller supports this, proposing that if the industry enables customers to mix their pursuit of a commercial return with investments in causes they believe in, it will spur interest in saving She also suggests connecting the idea of savings with some of the beneficiaries of investment like small domestic businesses, improving standards of living in developing countries and sources of clean energy Simon Tay also wants the industry to create products that allow retail investors to collectively invest in infrastructure projects, to better mobilise private savings for productive uses Ann Pettifor believes the financial services industry can reinforce this connection by supporting both public and private sector investment in wise, sustainable projects that tackle the triple crisis of energy insecurity, climate insecurity and job insecurity Honoré adds that the financial services industry should rebrand saving as hip, fun and playful by using gaming to tap into social networks and attract young people and celebrity endorsements 73 Coyle believes the financial services industry should fund a national effort to improve financial literacy Bijapurkar adds that financial education should not be restricted to explaining details of financial products alone but extend to how to think about financial risk holistically, focusing on total risk at the individual consumer’s level • Governments need to play their part too Effective policy is the final crucial element in fostering this new culture of saving It can accelerate and facilitate change in the behaviour of individuals and businesses with the right mix of incentives and inducements The panellists’ ideas provide some excellent insights into those policy levers and approaches with the most potential to produce the necessary results Coyle believes that governments should take the opportunity offered by the financial crisis to redraw financial regulation, making it simpler and focusing on competition Pettifor also believes that central bankers and governments must undertake reform of the banking system to regulate credit creation, and to restore and ensure low, sustainable rates of interest across the spectrum of loans More broadly, Tay urges governments to institute policies of inclusive growth that create higher wages for workers, and invest in advanced education and health care He believes that public savings should be harnessed to develop infrastructure, and governments should continue to use tax incentives to encourage investment there Taylor wants governments to redirect some of the public subsidy from tax incentives for middle-class savings to matched funding for savings among the less well-off Insufficient government incentives and support for savings is the number one challenge to individual financial prosperity in their countries according to survey respondents Lack of tax incentives is also the number one barrier that must be overcome if employers are to help their employees save more Correspondingly, increasing tax incentives is seen as the most effective reform to encourage savings by three-quarters of respondents And incentivising individual retirement savings with tax breaks is the number one way for countries’ systems for retirement savings to be made more sustainable and effective Analysis and conclusion Such a shift in attitudes will take time, as it will be necessary to challenge and overcome preconceived ideas and prejudices It will mean transforming how financial matters are understood and how financial education is delivered There is a role to be played by employers, as well as schools, due to their size and ability to influence their employees’ actions The financial services industry also must its part to ensure consumers have a sufficient level of financial literacy However, the specifics for such educational approaches differ between the thinkers Our survey respondents agree that education is vital, citing ‘lack of financial literacy’ as the second biggest reason people not save (behind not having sufficient income) Low levels of financial literacy are also seen by 42% of respondents as a main challenge to individual financial prosperity in their countries ´ Swieboda offers specific policy recommendations such as the establishment of statutory mandatory funded pension schemes at the EU level, the introduction of pension tracing schemes to allow for the tracking of pension rights from different sources and the removal of discriminatory tax rules which can prevent mobility of pensions (and thus workers) Guest essays • Financial education must be more effective Taylor suggests getting children into the savings habit by giving them school-based accounts, administered by banks, in which they can accumulate and trade various cash and in-kind credits linked to study and social service Introduction Survey respondents also see attitudes that must change Almost half (44%) say that the reason people in their country not save is because it is more satisfying to spend and borrow than it is to save A similar number (43%) say a lack of a savings culture is a main challenge to individual financial prosperity, which the Government should prioritise 74 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 The Future Prosperity Panel 2011 + In order to address the long-term savings challenges outlined above, the Economist Intelligence Unit, on behalf of Aviva, convened a panel of international thinkers to use insights from public policy, business and behavioural economics to consider new approaches to improve prosperity around the world – the Future Prosperity Panel (FPP) The Future Prosperity Panel is composed of: Jane Fuller Carl Honoré Alain de Botton Diane Coyle Rama Bijapurkar ´ Paweł Swieboda Simon Tay Ann Pettifor Matthew Taylor 75 + Jane Fuller Carl Honoré Alain de Botton Carl Honoré is an award-winning journalist and author After graduating from Edinburgh University with a degree in modern history and Italian, he spent time working with street children in Brazil He  has covered Europe and South America for the Economist, Observer, Guardian, Miami Herald, Houston Chronicle, Time Magazine, and the National Post (Canada) Alain de Botton is a writer of essayistic books that have been described as a ‘philosophy of everyday life’, and have been bestsellers in 30 countries He published his first book at the age of 23 and his latest work, ‘The Pleasures and Sorrows of Work’, was published last year Centre for the Study of Financial Innovation Co-director Jane spent more than 18 years working at the Financial Times, culminating in the role of Financial Editor, head of the companies and markets section In that post she launched the FTfm fund management supplement and was part of the paper’s senior management team She continues to have a training role at the FT and, with a colleague, is co-editor of Harriman’s Financial Dictionary A graduate of Cambridge University, Jane worked on provincial newspapers and launched an equestrian magazine before joining the FT His first book, ‘In Praise of Slow’, examines our compulsion to hurry and chronicles a global trend towards putting on the brakes The Financial Times said it was “to the Slow Movement what Das Kapital is to communism” His second book, ‘Under Pressure’, explores the good, the bad and the ugly of modern childrearing His books have been translated into more than 30 languages and appeared on bestseller lists in many countries Newsweek described him as “an international spokesman for the concept of leisure” ABC TV News called him “the unofficial godfather of a growing cultural shift toward slowing down” The Wall Street Journal hailed him as “an in-demand spokesman on slowness” Huffington Post labelled him “the godfather of the slow movement” Author It was with ‘How Proust can change your Life’ that Mr de Botton’s work reached a truly global audience This was followed by The Consolations of Philosophy, after which he returned to a more lyrical, personal style of writing with ‘In The Art of Travel’, where he looked at themes regarding the psychology of travel, such as how we imagine places before we have seen them and how we remember beautiful things In ‘Status Anxiety’, he examined an almost universal anxiety that is rarely mentioned directly: about what others think of us and whether we’re judged a success or a failure, a winner or a loser ‘The Architecture of Happiness’, discusses questions of beauty and ugliness in architecture Much of the book was written at Mr de Botton’s home in West London near the Shepherd’s Bush roundabout, a fairly ugly man-made construction, which provided a helpful example of how important it is to get architecture right! ‘The Pleasures and Sorrows of Work’ saw Mr de Botton travelling across the world for two years with a photographer, looking at people in their workplaces and reflecting on themes of work such as why we it?, how can it be more bearable?, and what is a meaningful life? In the summer of 2009, Alain was appointed Heathrow’s first Writer-in-Residence and wrote a book about his experiences, ‘A Week at the Airport’ He also started, and helps to run, a school in London called The School of Life, dedicated to a new vision of education Analysis and conclusion Jane Fuller is co-director of the Centre for the Study of Financial Innovation, an independent Think Tank that promotes debate on the future of financial services She is also the director of Fuller Analysis, an independent consultancy that she founded after leaving the Financial Times in 2005 In the financial reporting field, she chairs the Financial Reporting and Analysis Committee of the CFA Society of the UK, part of the international financial analysts’ organisation She was made a fellow of CFA UK in 2009 Journalist and author Guest essays + Introduction + 76 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 + + + Diane Coyle Rama Bijapurkar ´ Paweł Swieboda Diane Coyle runs the consultancy Enlightenment Economics She is a BBC Trustee and a member of the Migration Advisory Committee, and was for eight years a member of the Competition Commission (until September 2009) She is also visiting professor at the University of Manchester, a member of the advisory board of ING Direct UK and of the stakeholder advisory panel of EDF Energy Rama Bijapurkar is one of India’s most respected thought leaders on market strategy and consumer related issues in India She is also a keen commentator on social and cultural changes in the evolving liberalising India She has her own market strategy consulting practice and works with an impressive list of Indian and global companies, guiding the development of their business-market strategies She describes her mission as bringing “market focus to business strategy” The Economist Enlightenment Economics Ms Coyle specialises in competition analysis and the economics of new technologies and globalisation, including extensive work on the impacts of mobile telephony in developing countries She is the author of several books, including ‘The Soulful Science’ (Princeton University Press 2007); ‘Sex, Drugs and Economics’ (2002, Texere); ‘Paradoxes of Prosperity’ (2001, Texere); ‘Governing the World Economy’ (2000, Polity); and ‘The Weightless World’ (1997, Capstone/ MIT Press) Her latest book, ‘The Economics of Enough: How to Run the Economy as if the Future Matters’, was published by Princeton University Press earlier this year She has also published numerous book chapters, reports and articles, and was formerly a regular presenter on BBC Radio 4’s Analysis Previously Ms Coyle was Economics Editor for The Independent and before that worked at the Treasury and in the private sector as an economist She has a PhD from Harvard and was awarded an OBE in January 2009 Independent Director and Author Rama serves as an independent director on the boards of Infosys Technologies, CRISIL, Axis Bank, Godrej Consumer Products, Give Foundation (a not-for-profit company) and Mahindra Holidays & Resorts India Ltd An alumna of the Indian Institute of Management, Ahmedabad, Rama continues to be involved with her alma mater where she is a Visiting Faculty and also serves on the Board of Governors Rama’s work experience has been in market research and strategy consulting and includes leadership positions with McKinsey & Company, MARG (now AC Nielsen India), and full-time consulting with Hindustan Lever (now Hindustan Unilever India) Her new book “We are like that only – Understanding the Logic of Consumer India”, (The Indian edition, Penguin) has been well received and very favourably reviewed The international edition is called “Winning in the Indian Market – Understanding the Transformation of Consumer India”, (John Wiley & Sons) demosEUROPA – Centre for European Strategy President ´ Paweł Swieboda is President of demosEUROPA – Centre for European Strategy Previously, he served as the EU Advisor to the President of Poland between 1996 and 2000 He then headed up the Office for European Integration in the Chancellery of the President From 2001 to 2006 he served as Director of the Department of the European Union in the Ministry of Foreign Affairs where he was responsible for EU accession negotiations and subsequently institutional reform in the EU and negotiations on the financial perspective ´ Mr Swieboda is a member of the Lisbon Council; a member of the Advisory Board of the European Policy Centre; and a member of the Advisory Board of the Baltic Development Forum He is also a member  of the Advisory Group which assists the Polish government in its preparations for the EU presidency in 2011 ´ Mr Swieboda is the author of numerous articles on European integration and international relations, and has a column on foreign policy in Gazeta Wyborcza, Poland’s largest daily newspaper He is a graduate of the London School of Economics and the University of London 77 + Simon Tay Ann Pettifor Matthew Taylor Ann Pettifor’s special interests include the architecture of the international financial system and its impact on sovereign debt; domestic monetary and fiscal policy; and the challenges posed to economic policy by the twin threats of peak oil and climate change Matthew Taylor became chief executive of the RSA in November 2006 Prior to this appointment, he  was Chief Adviser on Political Strategy to the Prime Minister He was appointed to the Labour Party in 1994 to establish the party’s rebuttal operation and went on to be Assistant General Secretary, until December 1998 During the 1997 General Election he was Labour’s Director of Policy and a member of the Party’s central election strategy team Singapore Institute of International Affairs Chairman Simon Tay is a lawyer, an adviser on political and economic issues, and a public intellectual He teaches international law and public policy at the National University of Singapore and the LKY School of Public Policy He is concurrently chairman of the Singapore Institute of International Affairs (SIIA), an independent think tank that represents Singapore in the influential ASEAN-ISIS network to advise governments Mr Tay has previously represented Singapore at the 2007 Bali COP on Climate Change and at the 2002 World Summit on Sustainable Development His other commitments include lecturing as a visiting professor; speaking at meetings including the World Economic Forum, APEC CEO Summit, International Bar Association and Asia-Pacific Bar; and being featured in various international media In addition to his contributions to the public sector, Mr Tay has advised multinational corporations from America, Europe, Japan and the Middle East His advisory work focuses on risks and opportunities concerning regional business as well as on sustainability and environmental issues He was a Fulbright scholar at Harvard Law School and in 2002, was awarded an Eisenhower Fellowship in the US He is also an award-winning writer and was Singaporean Young Artist of the Year in 1995 In addition, he has written and edited books on a range of international and Asian issues His latest book, Asia Alone: The Dangerous Post-Crisis Divide from America, focuses on Asia’s relations with the US Previously, Ms Pettifor led a global advocacy effort aimed at the Paris Club, the World Bank and IMF to have the unpayable debts of the poorest countries written off As a result, and with the support of leaders ranging from Tony Blair, Chancellor Gerhard Schröder to Presidents Clinton and George Bush, more than $100 billion of debt was acknowledged as unpayable, and written off for 35 of the lowest income countries Ms Pettifor regularly attends World Bank and IMF meetings and worked first-hand with organisations in Thailand and Indonesia during the 1997 Asian Financial Crisis Later she worked in Buenos Aires with economists and parliamentarians during Argentina’s sovereign debt crisis of 2001 In 2004/5 she advised the Government of Nigeria on its negotiations with European and Japanese creditors in advance of its critical 2005 Paris Club meeting at which $18 billion of debt was written off by OECD creditors Ms Pettifor is a fellow of the New Economics Foundation (nef) in London where she dedicated three years to studying the post-Bretton Woods financial architecture This led to the publication of the ‘Real World Economic Outlook’ (2003) She also co-authored ‘The Green New Deal’, published in 2008 and updated under the title ‘The Cuts Won’t Work’ in December, 2009 Her most recent publication ‘The Economist Consequences of Mr Osborne’ was co-authored with Professor Victoria Chick RSA Chief Executive Before joining the Labour Party, previous roles included being a county councillor, a parliamentary candidate, a university research fellow and the director of a unit monitoring policy in the health service Mr Taylor was also the Director of the Institute for Public Policy Research between 1999 and 2003, Britain’s leading centre left think tank Mr Taylor is a frequent media commentator on policy and political issues, and has written for publications including The Guardian, The Observer, New Statesman and Prospect Analysis and conclusion In 2009, Mr Tay was with the Asia Society in New York, as Schwartz Fellow, directing a Task Force report on US-Asia relations under the Obama administration From 2002 to 2008, he chaired the National Environment Agency, Singapore’s largest agency for environmental issues Prior to that, he was a nominated member of the Singapore Parliament and previously also initiated and directed the Singapore Volunteers Overseas In 2006, he received a National Day award from the Singaporean government New Economics Foundation Fellow Advocacy International Director Guest essays + Introduction + 78 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 The views, opinions, positions or strategies expressed by the thinkers and the Economist Intelligence Unit are theirs alone, and not necessarily reflect the views, opinions, positions or strategies of Aviva plc or its subsidiaries (as defined in the Companies Act 2006) (the “Aviva Group”) or any employee of the Aviva Group No member of the Aviva Group makes representations as to accuracy, completeness, currentness, suitability, or validity of any information contained within the opinions or materials and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from reliance upon the materials Join the debate www.aviva.com/fpp Aviva plc St Helen’s, Undershaft London EC3P 3DQ +44 (0)20 7283 2000 aviva.com Registered in England Number 2468686 [...]... The new mass pensions vehicle that will go live in the UK from 2012, the National Employment Savings Trust (NEST), is aiming to keep annual charges to less than half a percentage point 18 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 2 Play to win "Maybe we can unle ash a savings re volution by making saving more like a game." Carl Honoré, journalist and author... best-selling author and founding member of the School of Life and Living Architecture, demonstrates that current attitudes towards savings can be changed and reconnected to positive traits such as generosity Guest essays Analysis and conclusion 26 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 3 Rebranding saving "Saving prope rly unde rstood should not sugge st a dour... and conclusion 32 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 4 Saving made simple The first step on the path to financial security is to build up some savings Without that cushion, people have no resilience in dealing with the normal ups and downs of life Yet even in a rich country like the UK, the lowest-earning third of households have no savings and many people... internationally best-selling book ‘In Praise of Slowness: How a Worldwide Movement is Challenging the Cult of Speed’, believes that gaming holds the key to changing savings behaviour Guest essays Analysis and conclusion 20 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 2 Play to win "The gaming instinct is hardwired into us." Imagine children springing out of bed to tidy their... destination of the funds can be a big motivator What might be the sources of future prosperity? Investment themes which might capture the imaginations of savers include renewable energy, electric cars, water purification and conservation, social media or helping communities in Africa Introduction Where does the money go? 16 Big picture thinking – towards sustainable savings The Future Prosperity Panel... to be seen in the marketplace How far our values have travelled! 28 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 3 Rebranding saving Continued "We can also make saving synonymous with the e nhance me nt of our re ce ptivity to highe r qualitie s: ge ne rosity, e ntre pre ne urship and courage." Savings as the root of generosity Intellectually, the way to defend... supported an unsustainable boom in the property and equity markets, the unravelling of which left individuals and financial institutions insolvent, forcing large-scale government intervention and causing much of the economic hardship that still reverberates today Introduction The 2008 financial crisis and its roots in the 1997 Asian crisis 10 Big picture thinking – towards sustainable savings The Future... annual percentage rates (APRs) and terms and conditions for the mass of different savings products on the market, especially with poor levels of financial literacy? Will they not just give up altogether when faced with paragraph after paragraph of regulatory small print? 34 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 4 Saving made simple Continued "C hange and... will take time and, as demand in the developed world recovers, it seems likely that imbalances will re-emerge, challenging policymakers again Introduction Investing for the future 12 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 1 Making the connection: empowering savers + Jane Fuller, co-director of the Centre for the Study of Financial Innovation, a financial services... produced that there is enough both to gratify the slothful and oppressive profusions of the great and at the same time abundantly to supply the wants of the artisan and peasant.” 30 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 4 Saving made simple + Diane Coyle, OBE, managing director of economic consultancy Enlightenment Economics, former adviser to the UK Treasury, ... as volunteers 06 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 Preface by the Economist Intelligence Unit Big picture thinking – towards sustainable savings is... current attitudes towards savings can be changed and reconnected to positive traits such as generosity Guest essays Analysis and conclusion 26 Big picture thinking – towards sustainable savings The... financial crisis and its roots in the 1997 Asian crisis 10 Big picture thinking – towards sustainable savings The Future Prosperity Panel 2011 The savings health of nations By Robin Bew, editorial director and chief