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Business Reporter · December 2014

2

Pensions

By Steve Webb Pensions minister

W

HEN I was appointed pensions minister in May 2010, I might have wondered how long I would have to make my mark. After all, the previous 13 years had seen the name plate on the door changed an incredible 10 times.

But, four years and seven months later, I’m still here. And having had the privilege of serving in this role for almost an entire parliament, I can well see how, among all that upheaval, pensions policy was so lacking in stability or direction.

Under the coalition government, we have replaced the chaos with a clear vision of what we want to achieve: a stable pensions industry within a fairer society.

There is no greater example of this than the new state pension, a reform which will address inequalities affecting women, the low paid and the self-employed that we have had to tolerate for decades.

But, beyond that, it will give people true clarity about what they can expect from the state in retirement, encouraging all income groups to think about the future they want and to save for it. In turn, the much fairer new state pension has made another of this

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THE ESSENTIALS

Publisher Bradley Scheffer | Editor Daniel Evans | Production Editor Dan Geary

Creating a stable pensions industry within a fairer society government’s boldest reforms possible.

From April next year, we are removing the requirement on individuals to turn their defined contribution savings into annuities when they retire.

As a Liberal, the idea the state knows best what people should do with their own money has always troubled me. But I do recognise that people need impartial guidance to make such significant decisions for themselves, which is why we have also committed to this, free at the point of delivery.

Over the past two years, we have successfully implemented automatic enrolment into workplace pensions, with five million now “in” – saving more or saving for the first time. By 2018, that number will have doubled.

And, alongside this, we’ve toughened regulation and minimum quality standards. For example, we’re ending

Steve Webb MP

rip-off charges so that, from next April, more than 99p in the pound put into a pension scheme will have to turn into an actual pension.

But the job is not done, and even in these final months of the parliament, we are busy taking through a new bill which will finally provide a genuine answer to the decadeslong decline of the traditional final-salary pension scheme.

This will encourage innovation in the pensions industr y by enabling the development of products which provide a better balance of risk between workers and employers, potentially giving millions of savers a better deal.

Four years and seven months may be a long time in this job by previous standards, but my to-do list is certainly not exhausted.

While automatic enrolment has been an outstanding success, even when fully rolled out, it won’t completely solve the problem of people under-saving for retirement. The next challenge will be to convince workers to save more than the statutory minimum of 8 per cent.

And I would also like to see the system of pensions tax relief made fairer, with people on average and lower incomes getting a bigger share of the money the government spends.

Some might call these aspirations ambitious, even unrealistic. But that is what people said back in 2010 – and it didn’t stop the pensions revolution we have brought about since.

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Pensions

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Auto-enrolment review planned for 2017

By Tim Adler THE GOVERNMENT plans to review its automatic enrolment pension scheme in 2017.

Auto-enrolment is the biggest change in workplace pensions for decades, encouraging even workers on low salaries to join company pension schemes for the first time. Back in 2002 the Labour government asked Adair Turner to head a commission to increase pension saving. In 2005, the Turner Report recommended introducing a national pension plan that employers would offer matching contributions to.

To date, 36,823 companies have signed up employees for auto-enrolment. By 2018 employees will be salting away 8 per cent of their salaries each month. And those 4.7 million employees signed up so far represent 43 per cent of the UK’s 11 million qualifying workforce.

Once fully implemented, an extra £11billion will be put away each year.

Pension experts agree that auto-enrolment needs to be fully implemented before changes can be made. Schemes could be simplified but tinkering with them now would complicate rollout, they say. Tim Jones, chief executive of pension provider NEST, says: “There’s very little you can do to make

the scheme more attractive right now given where we are.”

“Simplification is a difficult goal in the middle of something,” agrees Graham Vidler, director of external affairs, National Association of Pension Funds.

“The most important thing is that you press on with the current timetable before you think about making changes.”

Charles Counsell, executive director of The Pensions Regulator, adds: “There are a number of things you could do without having to change pensions legislation. I wouldn’t do it now because it’s just going to confuse matters.”

The pensions industry had expected one third of people to opt out compared with the 8-12 per cent actually doing so within the one-month opt-out window.

That figure drops to just 2 per cent once the one-month opt-out closes (employees can still drop out but have existing contributions kept).

Counsell says: “What’s really encouraging is the number of younger workers who are not opting out.”

Adds Jones: “We’ve all been pleasantly surprised by the low percentage of opt-out.” But 97 per cent of the UK’s 1.2 million companies have yet to sign up for auto-enrolment. “In one sense the hard work still lies ahead,” says Vidler. However, smaller companies are coming

dogberry’s eye view AS A FAN of the Candy Crush Saga – apparently around a billion games are played every day – Dogberry was obviously not surprised to see MP Nigel Mills joining in with this global obsession the other day. The problem was that, at the same time, he was supposed to be listening to experts give evidence at a meeting of the Work and Pensions

UK PENSION HOLDERS, 2013

15.4m 5.3m 2.8m

in work public sector employees private sector employees

fresh to the idea of running a company pensions scheme.

Larger employers may have had to incorporate legacy pension schemes, complicating rollout.

For smaller companies, the key is not to leave things to the last minute before 2018.

Counsell says: “I would urge those micro employers to get enrolled early. Don’t leave it to the last minute. Get set up as early as you can.”

The NAPF, which represents 1,30 0 pension sc hemes, recommends that employers have a plan in place, make sure they have a pension scheme on board and that their payroll department understands the

Committee. According to reports, he spent a lot of the two-and-a-half-hour meeting studying his iPad and swiping the screen as he played the game. The Inspector is glad to see the MP has since seen the error of his ways, saying, “I apologise unreservedly for my behaviour and realise it fell short of what is expected of an MP.” There were even suggestions made by

process. Although most SMEs are aware of auto-enrolment, there is still confusion as to how to implement it.

Vidler says: “We’ve got good awareness but a little more work needs to be done explaining the step-by-step process. There are gaps as to how you actually plan for auto-enrolment.”

Experts accept that even when the optimum 8 per cent contribution comes online, auto-enrolment will not meet the financial needs of most people.

Jones says: “The jargon for this issue is ‘adequacy’. Eight per cent is better than nothing.

It’s a great place to start from.

some that Mills was only trying to “keep himself awake” during a boring committee meeting. Now this is where Dogberry must make a stand. Pensions, long dismissed as something to deal with tomorrow by so many, are undergoing vital changes which will impact on us all. Officials are now on the trail of the whistleblower. Perhaps they should call Dogberry in to help sniff out the culprit.

3

Bonds for over65s expected to be snapped up

43% of employees already in autoenrolment schemes

Source: ONS

But there needs to be a debate as to whether contributions need to be larger, and who should cont r ibute – t he employer, the worker or the government.”

PENSIONER Bonds, two fixed-rate savings bonds offering over-65s better rates than they can get elsewhere, go live in January.

National Savings & Investments, which has £10billion worth to sell, expects to sell out quickly. The Treasury was due to announce on Friday what percentage return the one-year and three-year bonds would offer.

Previously Chancellor George Osborne projected that the bonds would pay 2.8 and 4 per cent respectively. The bonds do not offer savers an option to take income monthly, which means either a 12-month or three-year wait for interest.

Despite this, experts say the deals will be snapped up, with a stampede for them in the New Year as savers are starved of decent rates.

Only half a million savers will be able to take advantage of the full deal, investing £10,000 apiece in each bond.

However, there are more than 10 million over-65s who qualify to open them.

Sylvia Waycot, of money analyst Moneyfacts, said: “They’re going to move really fast. There’s not going to be enough. Savings rates are so low they’ll be the only place you can get a good return.”

Business Reporter · December 2014

Pensions

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The way ahead: Making pensions both tax efficient and flexible

IndustryVIEW

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you could save hundreds if not thousands of pounds in fees by ensuring your pension is appropriate for your needs. If you asked someone, would they move their car insurance provider if they would save more than £250* in charges, the plethora of comparison sites seem to suggest the answer is yes. How many people do?

T

he radical nature of the changes on how you can take an income from your pension could fundamentally change how the British public view pensions.

From next April if you are of minimum pension age (currently 55), you will have complete control over how much income you take from your pension (excluding final salary schemes). This flexibility, accompanied by changes to pension death benefits could change the culture of income drawdown for the few and annuities for the masses. These changes may

once and for all dispel two common myths about pensions.

MYTH 1: There is no point moving my pension as I am only a few years away from retirement Changes to retirement income mean that unless you are going to purchase an annuity with all your retirement savings at retirement, you could still hold a pension well into your 70s or 80s. If you are currently approaching your 60s and are thinking there is no point reviewing your pension arrangements, this could be a costly error. Over a 10- or 20-year period,

MYTH 2: I have left it too late to contribute to my pension People currently read their annual pension statement and are disappointed by the estimated annual income that is projected due to historically low annuity rates. Rather than acting as a catalyst to save more, it has left many thinking, “Why bother?” The new rules around access mean it is never too late to start a pension or contribute more if you can.

Tax relief on contributions plus the tax-free lump sum available at retirement (normally up to 25 per cent of your

pension), accompanied by the new income flexibility, make pensions both tax efficient and flexible.

So what does this mean? It means it may be time for you to review your pension savings. If you have a number of pensions, consider whether it makes sense to hold these with one provider. Remember, it is your money. If you decide to bring your pensions together be sure to check that you are not losing any valuable benefits on transfer and if unsure always seek financial advice.

Alliance Trust Savings award-winning Select SIPP provides clients with both investment and income flexibility.

Alliance Trust Savings administers more than £6billion in assets in SIPPs, ISAs and dealing accounts.

Patrick Mill (far left) is managing director at Alliance Trust Savings www.alliancetrustsavings.co.uk

*Based on comparing a pension charging 0.45 per cent per annum against Alliance Trust Savings charge of £186 on a pension worth £100,000. Please note other charges may apply.

Risk warnings: please be aware that the value of your investments and any income from them can go down as well as up and fund value may be less than the amount you originally invested. The value of tax savings and your eligibility to invest in a SIPP depends on individual circumstances and tax rules may change in the future. You normally cannot take an income from your pension until age 55. Our charges are guaranteed until 2016 but may be subject to change thereafter.

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I

T IS A classic feature of a civilisation in decline that it is afflicted by an unstoppable growth in non-jobs and sinecures, funded by the state and which no one has the guts to curtail. It is the task of Tories to do the curtailing.

We want to cut taxes, don’t we? We want to cut spending, yes? Well, let me suggest a policy that would not just enable us to save billions a year – more than enough to take a penny off income tax, simply by cutting bureaucracy – but would help us pay to build the homes we need, and finance the roads, railways, power stations and airports that this country is crying out for.

It would help us to cover the cost of the vast and growing army of older people; and it would end an absurdity – an ontological explosion in the public sector of a kind that has not been seen since the jobbery and Buggins’-turnery of the later Roman Empire.

To explain this opportunity, let me ask you a question I recently posed to a senior member of the government. How many public-sector pension funds do you think there are in the UK? I asked. “I don’t know,” he said. “A few hundred?”

Keep going, I said. “A thousand?” he hazarded.

I pointed upwards. His eyes rolled. “Ten thousand?

You tell me!”

I told him. There are more than 39,000 publicsector pension funds in this country – each with its own trustees, each with its own managers and advisers and accountants. Every quango, every university, every branch of local government has its own pension fund, from British Nuclear Fuels to the Meat and Livestock Commission to the seven – yes, seven! – that were created to manage the pensions of those who were involved in the London 2012 Olympics.

The waste is extraordinary. Think of all those advisers and investment managers taking their fees – their little jaws wrapped blissfully around the giant polymammous udder of the state. Think of the duplication.

But it is worse than that, because this country is missing a huge opportunity, and one that is being exploited by more sensible governments around the world. Other countries have realised that it is mad to keep their pension funds divided into tens of thousands of relatively tiny jam jars of cash. They have smashed the jam jars, pooled the pension funds – and created gigantic sovereign wealth funds which they are using to invest in high-yield assets. The Dutch, the Canadians, the people of Singapore – they are all using pensionfund cash to invest tens of billions in infrastructure and housing, some of it in London.

We welcome that investment, of course. We are grateful. But is it not absurd that we are not able to call upon British pension funds to perform the same function? If we amalgamated our local authority pension funds, we would have a war chest of £180billion; and if we added all the public-sector pension funds, we would be talking hundreds of billions – and suddenly we would be able to direct those vast UK assets to the support of projects that are both socially useful and vital for the economy.

We will need to spend £100billion in the next 10 years on power stations, if we are going to keep the lights on. If we pooled our pension fund

Why the

39,000

public-sector pension funds in this country should be rolled into one We need a Citizens’ Wealth Fund, writes Boris Johnson assets, and created a Citizens’ Wealth Fund, we would be able to get those schemes going – from new roads to new tunnels to hundreds of thousands of new homes for sale or rent (to say nothing of the new four-runway hub airport we need). And these investments would be attractive, because typically they would have a much higher yield – 7 or 8 per cent – compared with the 2 or 3 per cent currently achieved by pension fund managers in bonds or gilts. Roads and tunnels can be tolled; airports have charges; railways have passengers – and so on.

There would be a decent revenue stream from such investments, which is more than can be said, frankly, for the investments made

by British public-sector pension fund managers over the past 20 years. They piled into the banks, and lost colossal sums in the crash of 2008 – eight times more than it cost to bail out

Business Reporter · December 2014

Pensions

5

“The waste is extraordinary.

Think of all those advisers and investment managers taking their fees – their little jaws wrapped blissfully around the giant polymammous udder of the state”

RBS. The NHS alone has a black hole of £300billion in its pension fund, and across the public sector it is hard to see how we will meet our obligations to future pensioners.

In London, the local authority pension fund is already paying for 80 centenarians – people who have been retired for 40 years. Their numbers will swell inexorably as people live longer and longer; and you may be interested to know that the life-expectancy of the average Londoner has risen by about 18 months just since I have been Mayor. How are we going to pay for all these people?

Part of the answer is to increase the returns of the pension funds, with bolder and more strategic investments. And if we pooled those funds, we would find big and immediate savings in bureaucracy – perhaps £5billion a year; enough to pay for an aircraft carrier or something more useful.

What is the obstacle to this plan? It is the vested interests, of course. For decades now, the public-sector pension fund has been the place where you stick old Doobury, the good egg who is coming up for retirement, the soonto-be-ex-employee who is looking for another string to his bow. The little pension funds will fight for their independence; they will make a l l s or t s of s pu r iou s arguments about the need for “localism” in managing this dosh, when of course the adv ice is all subcontracted to the same leg ion of i nve st ment managers, and what they really care about is their fees and their tickets to Wimbledon from the investment managers and their golf-club bragging rights.

The vested interests must be ruthlessly overridden. It is time for Britain to have its own Citizens’ Wealth Fund, deploying our assets in a useful way, helping us to bolster the pensioners and cut pointless public expenditure at the same time. Away with the later Roman Empire, and forward with 21st-century Britain.

This is an edited version of an article which first appeared in the Daily Telegraph on October 6

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Pensions

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RICHARD HARDWOOD

DIVISIONAL DIRECTOR OF FINANCIAL PLANNING, BREWIN DOLPHIN

THERE’S A problem brewing. We haven’t got our heads around how long people are living for. When pension schemes were first introduced in the Fifties, the average retirement age was 66 and people were expected to live until they were 77. So you would be funding 11 years of retirement. Whereas today people hope to retire at about 61 but are living to about 82. So we’ve got half the time to fund double the life expectancy.

Although it’s unpalatable, the truth is that people are going to have to retire later and later. If you are living longer, you’re going to be forced to save more and retire later. The consciousness has not quite caught on about longevity. Most people are going to find saving enough to provide them with a large enough fund is going to be difficult.

Auto-enrolment is a good start, but it’s only a start. I don’t think that it has improved the quality of the schemes, even though it has widened their coverage. And a scheme that just complies with the auto-enrolment 8 per cent minimum isn’t going to cover your financial needs at all.

I don’t want to be all doom and gloom. For years governments have tinkered around with pensions so that people have become petrified about putting money into vehicles they can’t control. The Budget changes mean people will engage with pensions a lot more. All this scaremongering about pensioners blowing their pensions on holidays has been stupid criticism. The new rules treat clients as grown-ups so have come as a breath of fresh air.

| Follow us on Twitter: @biznessreporter putting away a sum anything between 20 to 30 times what you spend each year.

For most people that’s going to be difficult. But there are some simple steps you can do to shore up your retirement planning.

First, put away money at an early age so that you’re going to benefit from compound interest.

The simple truth is that you need to put away money each month and ensure your investments are low cost.

And if you’re on a higher rate, make sure that you’re getting higher-rate tax relief on your pension.

Keep the taxman informed that you’re paying into a pension.

Make sure your National Insurance payments are up-to-date. You need to have 35 years of NI contributions if you want to take full advantage of the maximum £16,000 per year state pension.

The state pension is still a really good deal.

Viewpoint: What’s the best way to save for retirement?

TOM McPHAIL

HEAD OF PENSIONS RESEARCH, HARGREAVES LANSDOWN

IAN PRICE

DIVISIONAL DIRECTOR FOR PENSIONS, ST JAMES’S PLACE WEALTH MANAGEMENT

IndustryVIEW

THIS MONTH’S Autumn Statement has raised the profile of saving for retirement, which admittedly is not the sexiest subject.

Auto-enrolment is a good start but it’s not enough. What people need to realise in autoenrolment is that, even when their stepped contributions increase to 8 per cent, it still won’t be enough to fund their retirement.

The mantra for financial health is simple: spend less than you earn, protect against disasters and invest wisely. However, spending less than you earn is difficult for some people.

If you are self-employed, then you need to start building your pension contributions into what you charge clients. It’s an overhead that you need to factor in.

One trend is for wealthy clients to sell their houses to fund retirement. Barrett Homes is

actually developing communities for those who have downsized their homes. I definitely see this as a growing trend.

BEN WESTAWAY

MANAGING DIRECTOR, JESSOP FINANCIAL PLANNING

THE ONLY way to feel secure that your money isn’t going to run out during retirement is by

INCREASINGLY, financial planning will be channelled through the workplace. We’ve moved away for the paternalistic pat-on-the-head company pension scheme, to the completely individual pension plan without matching contributions, to this latest third way.

While the reforms are a good thing, they haven’t entirely solved the problem of people not saving. The statutory 8 per cent will not be enough to take care of people’s pension requirements. The next government and the one after are going to have to do some more work here.

The starting point is that you should join a company pension scheme. There are now very few people for whom it doesn’t make senses to join a workplace pension. Think of it as a savings plan that doubles your money whatever you pay in.

Even if you’re an older employee, it still makes sense to join: your investment is tax free and from the age of 55 you can take your money out.

But even auto-enrolment may be out of reach for lower earners for whom every pound counts.

The only people it doesn’t make sense for are those struggling with debt or putting food on the table.

Will drawdown be your flexible friend?

F

rom April, if you’re over 55 you can access your pension fund how and when you want.

The traditional form of pension income is called an annuity, which is guaranteed for life. The alternative is called a drawdown, which offers complete flexibility, but isn’t guaranteed. There’s also a middle option – “annuity drawdown” – that offers a bit of both.

The question is, which one should be your friend in retirement?

Everybody’s retirement will be different and here are three key things you should do before you retire: 1. Check if drawdown is right for you. (Try an online “annuity or not” calculator.) Are you willing and able to take on the risks of drawdown? Do you need secure income?

2. Check you have enough money to achieve your target income. (Try an online retirement income forecaster tool.)

Would your income be sustainable using

match your circumstances and need for income/cash in retirement – many schemes have default funds which work for some but may not be right for you.

drawdown? If not, is there anything you can do about it (working longer, for instance)?

3. Check out your current scheme(s). Does your scheme offer high guaranteed annuity terms that would be lost on transfer? Check your investments

Because your circumstances, needs and objectives will be personal to you, your drawdown plan should reflect this. Some employers provide help, but where full support is not available, seek out specialist advice.

Like any friendship, staying in touch is key to getting the most out of your drawdown plan. Circumstances change, markets change and drawdown is an ongoing process and never a one-off event.

By tailoring your drawdown plan to your individual needs and working to a sustainable retirement income, drawdown really can be your flexible friend in retirement.

Andrew Pennie (left) is marketing director at Intelligent Pensions 0800 077 8807 www.intelligentpensions.com

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The

£100,000 dilemma With the freedom to access pension pots, Tim Adler asks what would £100,000 invested five years ago in five asset classes be worth now? The results may surprise you…

Gold bullion

Stocks

£154,6 0

The FTSE 100 has returned 54.6 per cent over the past five years, according to the London Stock Exchange. Of course it has been a rollercoaster: the market plunged by 28.8 per cent when the financial crisis hit in 2008, before bouncing

House prices in London have risen by an astonishing 42.8 per cent over the past five years ac c or d i n g to Nationwide. Prices across the UK rose by 15.9 per cent during the same period.

The three cities with the highest house prices over the past year have been London (17.3 per cent), Bristol (13.2 per cent) and Cambridge (12.2 per cent), according to HomeTrack. But overall price inflation is slowing, with house price growth slowing to 8.5 per cent year on year. Scotland only recorded an ROI of 2.8 per cent and properties prices in Northern Ireland fell by 10 per cent.

£142,837

back by 27.3 per cent the following year. Last year the London stock market fell by 18.7 per cent year on year. And the stock market has shrunk by 1.36 per cent over the past 12 months.

£100,0 0

Gold bullion – those bricks of gold you saw James Bond struggling with in Goldfinger – are traditionally seen as the safest of investments. Indeed, the price of gold rose sharply ahead of 2008’s crisis – and over the next four years.

But gold lost 25 per cent of its value last year as the wider economy recovered. Gold tends to do well as an asset class when other investments such as savings accounts offer miniscule returns. Adam Ash, head of research at Bullion Vault, says: “In the first decade of this century you had a perfect storm for gold. The problem for gold is that the sense of crisis receded, which has made gold less attractive.”

Your £100,000 would buy just one third of a gold brick. Still, Ash says that it’s a good time to invest in bullion. He says: “Personally I think it’s a good time to buy gold. We’ve lost the heat and noise compared to two or three years ago. That said, I don’t see the price of gold going higher until the market starts to lose faith with the recovery and decides quantitative easing and low interest rates aren’t working.”

Property

0

Wine

Until recently wine was one of the bestperforming asset classes alongside equities and property, prices being driven up by the Far East. But the market peaked in June 2011 after the Chinese government cracked dow n on bribery and corruption – many of these fine wines were being given as presents to government officials – with prices falling by 30 per cent. But the fall stopped in mid-2014, and has climbed by 1.5 per cent since August. “You could argue this is a good time to buy. The market is definitely below trend so it might be the right time to dip a toe in,” says Justin Gibbs, co-founder of Live-ex.

Wines from Bordeaux are the only game in town if you are looking to build a cellar.

Bordeaux accounts for 75-80 per cent of the market. Labels to collect are Lafite Rothschild, Haut-Brion, Latour, Mouton Rothschild and Margaux – wines prized for their heritage and quality rather than their rarity.

Classic cars 0 8 ,4 0 2 1 £

0

Classic car values have soared in the last few years, fuelled by good returns, the capital gains tax-free status of private cars and the tangible nature of the investment. According to Hagerty International, prices have increased by 25 per cent in the last year.

However, some cars have dramatically outperformed the five-year figure. Bonhams sold an early E-type Jaguar for £53,200 in mid-2011. This year a similar model sold at Goodwood Festival of Speed for £203,100, while Gooding & Co sold a mint example for £337,000 – a rise of 382 per cent over 36 months. Eighties cars have also become a good investment: Ferrari 308 GTBs were worth about £21,000 as recently as January 2013. Now examples are selling for an average of £69,000 – an increase of 328 per cent over two years.

£212,000

Death of annuities has been ‘exaggerated’ ALTHOUGH the annuities market has fallen by 62 per cent to £5-6 billion this year, annuities advisers believe insurance products will bounce back once pensioners realise the risks of investing directly in the stock market.

Despite their reputation for poor value, annuities do provide guaranteed income.

“Reports of the death of annuities have been greatly exaggerated,” says Steve Paterson, chief executive of Intelligent Pensions. “There will be a reality check for people who may instinctively believe that an annuity isn’t a good thing, but realise there’s a risk of their pension running out before they die.”

David Slater, chief executive of Annuity Line, the comparison website, argues that the government is encouraging people to gamble with their future, and that the amount of risk involved will deter pensioners. “As people get older they want less risk, not more,” he says.

“Annuities now have to justify their existence,” concedes Steve Groves, chief executive of Partnership Assurance.

“Annuities were the most misunderstood financial product, with a lot of misinformation, but they have the highest level of customer satisfaction.”

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Creating DC pensions that work (for those who don’t win the lottery)

T

he growth of private sector defined contribution (DC) pension plans means that millions of British people are now responsible for their own retirement planning. Yet most will have little to no experience of investing, and many will have given little thought to how to pay for their retirement beyond entertaining vague hopes of winning the National Lottery.

Much effort has been expended in encouraging DC scheme members to become more actively engaged with planning for retirement, with frankly limited success so far. This isn’t surprising: making decisions about the composition of a DC fund means taking certain risks with one’s own future.

For people with no experience of investing, this can be a daunting prospect – so daunting, in fact, that for many people, especially those early in their careers, it probably doesn’t seem worth the hassle.

I don’t think this is necessarily a problem as long as scheme members are defaulted into a well-diversified fund that satisfies their individual needs, they understand that other investment choices are available and they are contributing as much as they can.

Achieving this is perfectly possible, but is dependent on scheme providers creating products that work.

The key ingredients are simplicity and flexibility. Simplicity because it’s very difficult to take somebody on a journey if they don’t know where they’re going, and flexibility because from April members will be able to choose different outcomes for their retirement (remaining invested, buying an annuity or taking the cash) and DC plans will need to reflect this. Investing in a good-quality DC plan may not seem as exciting as winning the lottery, but if you’re saving in a well-designed, well-managed scheme, it might just help you to secure the retirement you want.

Paul Bucksey (right) is head of DC at BlackRock www. blackrock.com

8 · Business Reporter · December 2014

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The very best in cus

The 2014 Top 50 Companies for Customer Service rankings saw some old faces and plenty of new entrants. We list the winners below…

FIRST RATE

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IRST RATE Exchange Services Ltd has been supplying foreign exchange services since 1994. We became a joint venture between the Post Office® and Bank of Ireland Group in 2002 and instigated a number of innovations, including 0 per cent commission which revolutionised the FX market and led to the Post Office® becoming the largest supplier of foreign currency in the UK. We value our clients and partners and our unparalleled reputation for customer service. We have complete focus on our customers. We strive to constantly improve the customer experience, managing customer expectations and consistently meeting them by delivering all required elements to schedule.

Like all companies that have call centres, we complete internal quality assessments, but we entered this competition to get an outsiders’ perspective on how good we actually are. We have improved on our results from previous years and to have come first overall for calls and first in the banking sector out of so many companies is a fantastic achievement, and one we are very proud to share.

AMERICAN EXPRESS

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T AMERICAN EXPRESS, service has been at the core of our company for more than 160 years. We view each contact with our customers not as a transaction or cost, but as an opportunity to deepen the overall relationship.

It’s a service ethos – a culture we’ve built and continue to foster – that focuses on building relationships and customer satisfaction at every touch point. Winning Best Medium Sized Contact Centre and coming ninth in the Top 50 Companies for Customer Service is an accolade we are proud of as we continue on our journey to become the world’s most respected service brand.

BAXI

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OR MORE than 30 years, Baxi Genuine Parts has been providing the heating industry with essential parts, accessories and consumables.

We are one of the largest parts distribution businesses in the UK, and support a wide range of brands within the Baxi group. We pride ourselves in making life easier for our customers, by providing a high-quality, reliable and fast service, and high-performance, safety-tested spares from the original equipment manufacturers.

The Top 50 programme allows us to demonstrate how much we value working in partnership with our customers. Furthermore, it shows us where improvements can continue to be made.

CAF

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HE TOP 50 programme is just the start of our commitment to our customers. Benchmarking ourselves against the service industry, not just our sector, gives us the confidence that we are offering world-class c ustomer ser v ice wh ic h i s somet h i ng we a re determined to build on.

We w ill be using t he Top 50 benchmark ing reports as the basis of our ongoing contact strategy, focusing on areas of improvement and ensuring we maintain t he high sta nda rds we have a lready reached. We have started to realise some of the benefits, with an impressive increase from seventh place in 2012 to fourth in 2014.

DENPLAN

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ARTICIPATION in the Top 50 has allowed us to understand how our customers view us, making sure we’re on the path to achieving our aim of “getting it right first time”. The results are a fantastic motivation for all of us, the benchmarking and operational tools give us a valuable insight into our customer service offerings and how

we can continually build and improve as an organisation. Established in 1986, Denplan provides private healthcare payment plans for dental care whereby patients are covered for routine preventative treatment, which is car r ied out by t heir Denplanregistered dentist.

DIGNITY CARING FUNERAL SERVICES

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ustomer service is at the hear t of what we do at Dignity. From the first contact with customers and their loved ones through every interaction we have with them, our aim is to give them reassurance that they are in safe hands.

Entering the Top 50 Companies for Customer Service awards has enabled us to measure and analyse our customers’ experience. Being awarded the Number One Contact Centre for Combined Channels for the third consecutive year has also demonstrated our consistent level of commitment to ensuring that our customers receive the best possible service through every communication they have with us.

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stomer service our clients are absolutely central to the overall business.

This ensures that all efforts are focused on improving the client experience.

NCFE

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ESPONSIVE, passionate and i n nov at ive, NC F E i s a n awarding organisation with a difference. We pride ourselves on our exceptional service, and the Top 50 helped us put this to the test. Through entering, NCFE was ranked against hundreds of other organisations nationwide to determine how our service compared with the best of the best across all sectors.

We’re delighted to have been placed eighth for call service and to be the only awarding organisation to feature within this prestigious list. But we won’t stop there! The Top 50 programme will help us continue to improve the high levels of service to our customers and make further enhancements to the way we do things.

Business Reporter · December 2014 · 9

and Dundee sites, and more than 300 home-working colleagues, all dedicated to delivering the best service to the millions of customers who shop with Tesco each week.

Our values underpin our passion and commitment to doing what’s right for colleagues and customers.

T hey are: “No one tries harder for customers”, “Treat people how we like to be treated”, and “We use our scale for good”.

TESCO

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T TESCO Customer Service Centres, our core purpose is to make what matters better, together.

We are a team of more than 2,500 people in our Cardiff

ABOUT THE TOP 50 PROGRAMME QUALITY SERVICE: TV personality Rachel Riley and comedian Josh Widdicombe hosted the prestigious Top 50 Companies for Customer Service awards at the at Park Plaza hotel in London, celebrating the best in customer service for 2014

ITV

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HE reason ITV Viewer Services elected to be part of the Top 50 for Customer Services is that we wanted to be part of a programme that supported a continuous journey of improvement. We have been a Top 50 member for five years and have experienced continued improvement, culminating in winning the Best Customer Services in the Telecoms and Media section for the fourth year in succession. This has been a significant year for our Viewer Services team, as we continued to be part of the Top 50 while implementing huge change, and we still improved on both our scores and rating from 2013. We have already joined the Top 50 for the sixth year as it ensures we deliver the best customer experience for our viewers.

JP MORGAN

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T J . P. M O R G A N A s s e t Management we are dedicated to providing a Best in Class client experience. The Top 50 has given us an additional opportunity to measure ourselves and gain valuable client-led feedback and insight on opportunities to continue to improve our standards. As a fiduciary, client service is a priority at J.P.Morgan Asset Management. Teams servicing

The Top 50 Companies for Customer Service is the industryleading benchmarking programme using real customers to mystery shop companies using their own KPIs. The programme is moving to multichannel customer benchmarking for 2015, where we will really see the best overview of customer service across channels.

Working with some of the best brands for customer service in the UK is a great privilege. To know that they have achieved their spot in the Top 50 off the back of real customer interactions provides them with a prestigious badge of honour. If you believe your company should be a part of this programme, or would like to find out more, please visit www.callcentre.co.uk/top50.

Raj Dattani Programme director Top 50 Companies for Customer Service

Continued overleaf

10 · Business Reporter · December 2014

Providing a responsive and professional service

AFFINITY WATER

INDUSTRY VIEW

ALLIANZ INSURANCE

MSL Property Care Services Limited is very proud of its achievement of Top 50 status in the company’s first attempt at entering the Top 50 Companies for Customer Service.

Jeremy Harrison, managing director, said: “In our first year of being in the Top 50 we are absolutely delighted with our achievement, and it is recognition of the consistent high level of performance given by our help desk team to our customers. We invest in our people to ensure that they are knowledgeable of their customers’ businesses and maintenance issues, to enable them to provide timely and effective solutions.

“I am very proud to see the name of MSL alongside so many other larger and well-known company brands. We are already working on the feedback from the Top 50 to further improve our customer service in 2015.”

MSL is a market leader in the provision of a wide range of reactive, planned and compliance property maintenance services throughout the UK, Ireland and parts of Europe.

MSL’s core market is the retail sector. Customers include William Hill, Caffe Nero, Age UK, Screwfix Direct, Maplin Electronics and New Look – all of which demand a very responsive and professional service to ensure continuity of their business opening hours, the safety of their staff and customers and for the protection of their brands.

At the forefront of the MSL service is its 24/7/365 helpdesk based in Halifax, Yorkshire, supported by state-of-the-art IT and telephone systems.

07734 066379 www.msl-ltd.co.uk

Our customers expect us to continue to listen to them and make further steps towards our vision of being the leading community-focused water company.

The Top 50 gives us the platform to share best practice and learn from fellow companies. This ultimately helps us to improve our customers’ experience.

AMICUS HORIZON AmicusHorizon is a charitable Housing Association managing 28,000 homes in southeast England. Joining the Top 50 helped us deliver great customer service – and change people’s lives.

ASDA Customer service is more important than ever, so Asda wants to know how it compares to the competition… Best in Retail again. Thanks, Top 50!

AVIVA Aviva is proud to be working in partnership again with the Top 50 programme. It’s a great opportunity to benchmark the service we deliver against the rest of the customer service industry and our own performance last year.

BARCLAYCARD Barclaycard is delighted to be involved with the Top 50 as it’s a great opportunity for us to benchmark our business against some of the best individuals/companies in the contact centre industry.

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Top 50: The very best in customer service

BETTER BATHROOMS Better Bathrooms is the UK’s largest independent bathrooms and tiles retailer. We pride ourselves on the professional and individual service we offer which the Top 50 represents.

BPHA This has been an ideal opportunity to benchmark our performance and to assess the impact of service improvement initiatives we implemented.

BRITISH GAS Top 50 provides us with true customer performance measurement and benchmarking for all channels, together with significant data to help inform our improvement strategy.

BT BT is committed to making service easy for customers, benefiting from independent insight such as inclusion in the Top 50 Companies for Customer Service.

CHAUCER DIRECT Being able to have a measure showing our performance in this environment will help us improve the service we provide our customers and understand the value it adds to the business.

CO-OPERATIVE BANK We support the Top 50 because it celebrates and promotes the contribution of contact centre professionals and

enables them to improve through best practice and performance insight.

CQC Care Quality Commission’s membership with the Top 50 programme reinforces our commitment to staff investment, review best practice and share thinking to improve our customer experience.

CUH ADDENBROOKES We are proud to be a part of the Top 50 and benchmark ourselves against industry leaders to ensure our customers continue to receive excellent service.

DIRECT LINE Our aim is to make it easier for customers to obtain good-value insurance cover.

We are delighted to be recognised for our customer service.

HILLARYS BLINDS Hillarys leads the way in bespoke window coverings and with thousands of customer interactions daily this programme gave us invaluable insight into their true experiences.

HGS (INFINITI MOTORS) Dedicated and passionate about customer excellence, we needed to benchmark ourselves to establish what to do to be industry leaders in customer excellence.

HGS (UNILEVER) HGS has worked with global consumer giant Unilever since 2007, managing its

consumer care line for the UK and Ireland

KC CONTACT CENTRES At KC Contact Centres, our number one priority is to deliver the best possible customer experience. We know the programme works because we have seen positive improvements in every year we have taken part.

LEGAL & GENERAL We joined the Top 50 programme in 2013 to get independent customer feedback about the quality of service provided to individual scheme members through our contact centre in Cardiff.

MET OFFICE The Met Office is the UK’s national weather service, providing our customers a quality 24/7 service offering scientific excellence in weather, climate and environmental information.

MSL PROPERTY CARE SERVICES MSL joined the Top 50 to help drive continuous improvement in our customer service and to learn from, and be benchmarked against, many of the UK’s leading companies.

MOLSON COORS Molson Coors is the brewer behind Carling, the UK’s best-selling lager and a first-time entrant for the Top 50.

NATIONWIDE We realise excellent service can often

Business Reporter · December 2014 · 11

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Top 50: The very best in customer service

be the key to attracting, retaining and growing our customer base. We are proud of the service we provide and recognise that we can learn from others in our sector and industry.

NOTONTHE HIGHSTREET The company entered the Top 50 programme in order to benchmark its current customer service offering against key market players and to also help focus on the growth and development of its customer service programme.

NS&I NS&I desires to have a contact centre that can support our drive to digital, with the required visibility of the customer journey, and Top 50 helped.

ODEON As a team we are very proud to be in the Top 50 – we are dedicated to delivering exceptional customer service to all our guests.

POKER STARS PokerStars joined the Top 50 because it

believes providing outstanding customer service is crucial to retaining its position as the first choice of poker players globally.

QVC For QVC, investing in the Top 50 Companies for Customer Service Programme is an essential element of our Customer Care Everywhere strategy.

RS COMPONENTS The Top 50 programme provide an invaluable benchmark to measure and assess performance.

SCREWFIX Recognising the need to make our customers’ shopping experience as convenient as possible is at the heart of Screwfix’s business, and becoming part of the Top 50 shows our commitment to providing a high standard of customer service.

SERCO Serco has been operating the Barclays Cycle Hire scheme since its inception in 2010 including its contact centre, which

has become recognised for its excellence in customer service.

TSYS

60K (SKY)

TSYS managed services specialises in contact centre solutions for financial service providers. We joined the Top 50 programme to support Nationwide’s “On your side” promise to its members.

60K Ltd is the BPO company that provides the face to some of the most respected companies operating in the global marketplace.

SPECSAVERS One of our core visions is to exceed customers’ expectations throughout t he e nt i r e c u s tome r j ou r ne y.

The measures and performances needed to be rated among the Top 50 are industry leading.

TFL We entered the Top 50 to primarily review how our service compares with others, in an industry which is constantly forward thinking. This has raised our profile internally and externally.

VIRGIN MEDIA Our contact centres create the link bet ween Virgin Media and our customers. Top 50 helped to drive amazing levels of service and increase engagement.

WALSALL HOUSING GROUP We wanted to measure the positive effect of recent changes within our contact centre against other high-performing businesses. Boosting team morale was also key.

THRIVE HOMES

WHICH?

At Thrive Homes, we pride ourselves on putting customers first. We are delighted our approach has won us the Best in the Public Sector Award.

We see The Top 50 programme as a way to help us validate our customer service provision and gain recognition from external organisations.

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INSIDE TRACK

Pe ns ion ss pe cia l

IndustryVIEW

12 · Business Reporter · December 2014

Pension freedom – a new dawn approaches

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Pass the pension parcel: Making the most of your money I nheritance and pensions aren’t two words you’d normally associate with each other in a hugely positive way – until now.

The raft of pension freedoms coming into effect from April 6 will make a real difference to how pension wealth can be preserved and cascaded down the generations. With the requirement to take an annuity gone, and the 55 per cent “death tax” charge abolished, pensions are now firmly positioned as an estate-planning vehicle of choice.

The end of the much-maligned death charge is pivotal and likely to see a U-turn in strategy for anyone whose primary concern is maximising what can be passed on.

The previous wisdom of stripping out funds and gifting the surplus income to minimise the death tax charge has given way to retaining funds within the pension as a more tax-efficient solution.

The devil, as ever, is in the detail, although I can’t cover everything in depth here. The new rules will allow those with a defined contribution (DC) pension to nominate anyone to inherit

their remaining pension fund as a nominee’s flexi-access drawdown account.

Where someone dies before the age of 75, their remaining pension fund can be passed on to beneficiaries to access this pot of money tax-free as and when they wish. Previously, this may have been taxed at 55 per cent, so reducing this to zero causes a sizeable increase in the amount which can be passed on.

It’s a different scenario where someone dies after age 75. Normal income tax rates of between 0 per cent and 45 per cent apply to money as it is drawn down from the inherited pension, depending on the income of the beneficiary.

An important caveat is that if a beneficiary takes the whole pot of money as a lump sum, tax at 45 per cent may automatically apply.

The health warning is for beneficiaries not to sleepwalk into a tax bill and to reflect carefully before deciding how much, and when, to draw down.

In either case, the funds are outside the beneficiary’s estate for IHT while they remain within the drawdown

account, and will continue to enjoy the opportunity for tax efficient growth while invested. Each time a pension fund is passed on after someone dies, the tax rate will be reset by the age at death of the last drawdown account holder.

It’s worth remembering that your will doesn’t normally control who inherits your pension. Your pension company usually makes the final decision, with reference to a Beneficiary Nomination form you complete, which indicates your preference. It’s vital to update your Beneficiary Nomination, so it can be taken into account.

“Next generation” beneficiaries can also name their own successor, who will take over the drawdown fund following their death, unlike the current rules where lump-sum death benefits are the only option for non-dependents.

This will allow accumulated pension wealth to cascade down the generations.

It does, however, rely on the pension company being able to offer nominee drawdown accounts.

Julie Hutchison (inset) is Standard Life’s consumer finance expert www.standardlife.co.uk/ ReadyWhenUAre

ollowing the most radical changes to the UK pension system for more than a quarter of a century, from next April anyone who has saved into a pension will find considerably more flexibility and choice over how they draw from their pension fund.

Choices will range from the security of having a guaranteed income for life via an annuity, increased flexibility offered by a drawdown pension, through to taking the whole fund as cash with 75 per cent of it taxed as income. Or you could mix and match to provide both flexibility and security of income.

This is a really great opportunity for consumers, but with so much choice how do you decide what is best for you? Additionally, despite all this good news there are still pitfalls and dangers of making the wrong choice.

For example, taking the entire fund as cash means you could end up paying lots of income tax, increase inheritance

tax liability, or reducing the amount you could pay into a company pension scheme if still working.

If income is required, there’s risk in making sure your hard-earned pension savings can provide an income for what could be more than 30 years of retirement. There’s also a real risk of inflation reducing the buying power of your money; and what happens if your needs change, as they probably will?

For these reasons, advice is crucial. The guidance guarantee announced by the chancellor is expected to provide information on the range of available choices.

Additionally, LV= has long stressed the importance of taking financial advice, ensuring people make informed decisions to meet their unique retirement needs and aspirations. www.lv.com/ retirement-plan

Business Reporter · December 2014 · 13

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here has always been a greater understanding of ISAs in the market than pensions. Why? In the main ISAs are tax efficient, easy to understand and accessible.

A pension or SIPP has always ticked the box from a tax efficiency perspective, but has been viewed as too complex and restrictive, especially when it comes to taking an income.

From April 2015, if you are of minimum retirement age (currently 55) you will have

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ust 6 per cent of people are on track for the retirement income they’d like or expect according to Aegon’s Second UK Readiness Report.

When asked in February, people said they wanted a £35,000 income in retirement and today this figure stands at £41,000.

complete access to your pension pot to withdraw as much or as little as you wish. This flexibility means every penny you save through lower charges you will have access to. The more you save means a better standard of living in retirement or a better car or holiday than you could otherwise afford.

Retirement is very real, and with annuity rates being low the benefit of transferring a pension to a more cost-effective solution is not as stark as it will be moving forward. For instance, if you assume you

Monthly saving trends The reforms have focused on how people can access their pension and they overlook the fact that the main factor which will determine people’s income is how much they save. Men save an average of £276 per month while women save £125; across the regions, those in Northern Ireland save an average of £83 a month, compared with £280 in London and the south east.

Despite the variations, the numbers have one thing in common – 94 per cent of people are likely to be disappointed with their income when they reach retirement.

Time for change

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Why it’s time to take a look at digital pensions Retiready allows people to input this information and get the full picture.

Similarly, traditional pensions provide an investment update once a year, and just 21 per cent of people have checked the performance of their retirement savings in the last six months. With an online pension everyone can log on to see how their savings are performing and track their progress.

The latest government figures show 87 per cent of the population now use the internet, while 12.4 million online banking apps have been downloaded in the UK. Despite the prevalence of internet use, just 11 per cent of people manage their pension online and Aegon believes this figure needs to rise.

In April this year, Aegon introduced an online service called Retiready, which allows people to save into a simple pension and ISA. The service gives users a Retiready score which tells them whether they are on track towards their retirement goal and if they are not, offers coaching tools that help them take steps to close any savings shortfall.

Receive an iPad when you consolidate £30,000 with Retiready

Get the full picture

www.retiready.co.uk

Many people have pensions from different employers, and it can be hard to remember what they’re all worth.

Patrick Mill (left) is managing director of Alliance Trust Savings www.alliancetrustsavings.co.uk

Making plans for pension pots

Monthly pension saving

Expectation versus reality There’s a huge gap between people’s expectations and their financial reality as most estimate their current savings will provide them with £18,000 a year when they retire. This is despite the fact that 2014 has been a very big year for pensions as at the Budget in March, the Chancellor announced a series of reforms designed to give people more freedom over how they access their pensions and interest levels have been high ever since.

save £200 a year in administration charges by switching your pension and then continue to save £200 a year over a 10-year period, you will have at least £2,000 more in your pension which you could access (if over minimum retirement age).

The choice, I am pleased to say, is now yours.

IndustryVIEW

My view The pensions choice is now yours

Aegon firmly believes that the pensions industry needs to catch up and offer digital pensions, and the company is giving people the tools to do so. Until March 31, anyone who consolidates £30,000 of new money on Retiready will receive an iPad Mini 2, which they will be able to use to take charge of their retirement savings. Terms and conditions apply. By making pensions simple and accessible, Aegon hopes to address the current situation whereby the majority can expect to fall well short of their retirement goals.

What you’ll get back depends on several things, for example how your investments perform. You may get back less than you invested. Retiready is for customers who are happy with their own decisions, if not you may wish to seek advice. Transferring may not be the best option for you.

he countdown has begun. New rules on pensions are due to come into effect in April next year – and there will be more choice than ever before for people aged 55 or over who want to access their pension funds.

Back in March, the chancellor’s announcement that people would be able to take their whole pension pot as a lump sum caused a few shockwaves. Talk quickly turned to how people might spend their lifetime savings.

Remember the infamous Lamborghini purchase spoken of by pensions minister Steve Webb?

Eight months on, there’s evidence to suggest that Britain’s over 55s are not the spendthrifts that some people might have suggested.

Research carried out by ICM on behalf of Aviva indicated that nearly two thirds of people thought that “having control over how you spend your pension pot is a good thing”.

But perhaps even more tellingly, 61 per cent of those questioned said that as the pension rules were loosened, people would need to show greater restraint in coming years to avoid running out of money. When it comes to spending their life savings,

people are clearly realistic about the need to make their money last the average 20 to 25 years spent in retirement.

One thing seems certain. Relying solely on the state is unlikely to allow most people to live out the retirement they might have wished for. Although a new single state pension of around £150 a week is due to start in 2015, this amount wouldn’t even be enough to cover the basics for many of us. But topping it up with a private pension may just allow older people to continue to enjoy some of life’s luxuries.

But, sad to say, certain luxuries are likely to remain well out of reach. The average defined contribution pension pot of people reaching retirement is around £60,000.

The cheapest Lamborghini, the Huracan, is £180,000.

So maybe it’s time to park those dreams of Italian supercars, in the unlikely event that you ever entertained them in the first place. But do keep a close eye on the value of your pension plan. Checking what it’s worth now will help you make the right decisions ahead of April’s big changes. www.aviva.co.uk / retirement-centre

IndustryVIEW

Business Zone

14 · Business Reporter · December 2014

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The future

The reason customers are the best judges

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haucer Direct has flown straight into the Top 50 Companies for Customer Service in the first year it entered, being placed in the Top 50 in all four categories: phone, email, social media and online chat.

Chaucer Direct offers great-value car insurance, van insurance and learner driver insurance, along with some of the very best service in the insurance industry. It has a unique approach to customer service that focuses on what the customer needs and ways of making things easy for customers.

Paul Baxter, head of Chaucer Direct, confirmed: “We place a huge emphasis on customer service and it is extremely gratifying for our team to be recognised as one of the best companies for customer service in the UK. I am

extremely proud of the service our team gives and of its achievement in getting into the Top 50 Companies for Customer Service.”

Chaucer Direct provides regular training for its customer service team, making sure it provides the highest standards of service to customers.

The team’s focus lies on this service and Chaucer Direct continuously strives to work hard to be the most recommended motor insurance provider.

To maintain its success, Chaucer will continue to look and learn from awards like this. Most importantly, it listens to customers and acts on their suggestions. As Russell Wilson, contact centre manager, states: “Who else is a better judge of our performance?

When we receive ‘Thank You’ cards from

happy customers, as we have done in the past, we know it’s worthwhile.”

With a fully qualified contact centre team and dedicated claims team all based in one place, Whitstable in Kent, Chaucer can maintain a consistently high standard across the business.

Chaucer Direct sells motor insurance directly to customers through its website www.chaucerdirect.co.uk and its staff are always happy to talk to customers on 01227 284848.

You can follow them on Twitter @chaucerdirect and talk to their customer service team @chaucerhelp.

For useful tips and hints on driving and the latest news on motor insurance follow Chaucer Direct on Facebook/chaucerdirect

The debate: Why do strategies fail?

Andrew Mutch

Julian Johns

Chief customer officer BPA Quality

Chuka Umunna video special

In an interview filmed exclusively for Business Reporter, Shadow Business Secretary Chuka Umunna discusses how the future is bright for UK SMEs http://bit.ly/brsmallbiz

VP, EMEA Conversocial

If you can’t measure your strategy, you can’t deliver it. At BPA Quality we have worked with many of the world’s leading customer-centric organisations for more than 25 years, and have found that the most successful deliver strategies with clear, measurable plans. They also have defined results criteria, a passion for customer excellence and delivering results, and robust and rigorous training, coaching and development programmes.

They are continuously monitoring their systems and ensure that everyone in their organisation buys into it. BPA Quality helps our clients’ strategies to succeed by maintaining performance and goal focus. We monitor them independently, and add value through remote call monitoring, benchmarking, mystery shopping and the delivery of enhanced training. That drives results, be they increased volume, customer satisfaction or a better bottom line. Organisations that fail to measure, monitor and train run a serious risk of seeing their strategies fail.

Successfully implemented contact centre strategies show a level of co-operation and an understanding of the points of ownership. One reason why contact centre strategies fail starts early in the process – when department heads define need and then have to find the right technology to address that need.

At Conversocial, we often see a dilution of ownership between marketing and customer support; with marketing keen to protect the brand in the very public social media space. This dilution slows down and hinders effective change in the social media environment, particularly in social customer service. For example, only 33 per cent of the social media customer service solutions being used by companies are actually selected by the customer service team. The rest are chosen by marketing to fulfil a need more focused around follower count and publishing, whereas customer service teams are more focused on firstresponse time and average handling time.

0800 195 05 06

www.conversocial.com

How cloud is an enabler of change

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e’re all familiar with the term “cloud” today, but what does it mean for managing customer contact?

Using cloud for the contact centre simply means that rather than having to manage a range of technology yourself, you access a service in the cloud that will support all of your contact centre services and provides centralised web-based management.

With your customer service telephone lines and other contact channels redirected to the cloud provider, agents simply log on via the web to handle services.

Freed from the need to manage the technology, organisations can concentrate on managing other more important aspects of their businesses, such as the customer experience or in developing their contact-centre staff.

Many organisations also find that cloud can become a key enabler of change, allowing a range of organisational and process changes, and delivering even greater benefits to the business.

By their very nature cloud contact centres also support more flexible staff working practices, as well as more flexibility in staff location, even enabling home working, either as the norm or as part of a disaster recovery strategy. Virtual contact centres can also be more easily developed with cloud, together with the use of expert agents brought into a customer conversation when needed, regardless of where they are located.

There are also more generic benefits, such as no capital investment and the ability to scale service provision based on demand.

VoltDelta has been offering innovative, cloud-contact centre services in Europe since 2007.

James Glasspool is director of strategic marketing, VoltDelta International www.voltdelta.net

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In focus: Life’s too short to be kept on hold

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eading qualification provider NCFE has been placed eighth in the country for call service, according to the prestigious Top 50 Customer Service Awards 2014. The Newcastle-based organisation was the only awarding body to be placed in the Top 50 list, and was in good company with big names such as Asda, ITV, Nationwide and the Met Office also competing.

Working with customers from FE colleges, training providers, schools and employers as well as engaging with learners, NCFE has various teams throughout the business who interact closely with their customers on a daily basis.

Jill Gray, customer services manager at NCFE, commented: “I’m absolutely delighted

with NCFE’s placing in the Top 50 Customer Service Awards because we really do put service at the heart of everything we do – it’s so important in every business. We’ve made a decision to never use any machines – everyone who calls us will speak to a real person without having to press any buttons!

“The centre support assistants are all multi-skilled and have their own accounts to look after, which gives the service provided to customers a much more personal touch.

We also make sure we never keep customers waiting, always answering the phone in just two rings – life’s too short to be kept on hold!” service@ncfe.org.uk www.ncfe.org.uk

Business Reporter · December 2014 · 15