Emma Simon talks to the Society of Pension Professional’s new president Sophia Singleton about how a new Government and an insightful girl guide might inspire a new approach to retirement savings
After almost 30 years working across the pensions industry, Sophia Singleton, a partner and head of DC consulting at XPS and the newly appointed president at the Society of Pension Professionals (SPP), says the industry needs to find better ways to help people move towards a more comfortable retirement.
But she remains optimistic that the industry is changing for the better. In her new role at the SPP she says she expects to be involved in the effective implementation of various new policy initiatives across the industry.
As she points out, her appointment has come at what could prove to be a significant period of change in the industry. “I was appointed on 1 June, one week after Rishi Sunak called the general election. Six weeks on we have a new government, who have been elected on a ‘change’ manifesto. It’s a fantastic time to take on this role. Looking forward, I think it’s going to be a really interesting few years for the industry.”
Singleton says she has been fortunate to take the helm of the SPP when it is in such good shape. “We’re really thriving as a body and the influence we’re having on policymakers has really grown.” She says she is looking to build on this, reflected in the recent appointment of a new head of PR and policy at the organisation.
However, unlike other industry bodies, Singleton says the SPP won’t be sending the new pensions minister, Emma Reynolds, a shopping list of demands or detailed suggestions on how to improve the industry.
“We have just one key ask of the new government, and that is to take sufficient time when devising pensions policy; to consult with the industry and to allow time for things to be properly implemented.”
As she points out, this can ensure better pension policy that is focused on the longer term, and reduces the chances of less positive unintended consequences from new legislation.
Does she think this has been a problem with previous pensions policy? Singleton is diplomatic in her reply, but while not criticising previous administrations or specific politicians, she points to the abolition of the Lifetime Allowance (LTA) as a prime example of how problems can arise from legislative change that is perhaps more focused on political expediency, and announced without prior consultation.
“The removal of the LTA was certainly a surprise,” she says. “The various complexities involved in removing this allowance resulted in the Department of Work and Pensions writing to pension savers to say maybe think about not retiring. That’s not a great outcome for members. This is why we want to see proper consultation on proposed legislation, to ensure the potential impact on members remains at the centre of pension policy.”
Implementation challenge
This approach illustrates the main purpose of the Society of Pension Professionals. Unlike other industry trade bodies, this is not a lobbying organisation. Instead, it is a cross-industry body focused on the effective implementation of pension policy.
“Our strategic objective is to make sure policies are implemented effectively in a way that works for the industry and for members. We obviously respond to industry consultations, but rather than saying we want the government to do X, Y or Z, we’ll advise them on what we see as the best way of achieving their
stated objectives, avoiding potential unintended consequences.”
In order to deliver on this objective, the SPP membership includes the full spectrum of firms working across the pensions ecosystem. “Our members include pension providers, consultancy firms, actuaries, independent trustees, fund managers and lawyers, obviously working across both the DC and DB sectors,” Singleton says. “It is a complex industry, but we bring together these different areas of expertise so that our responses to policy represent the industry as a whole. Our committees are multi-disciplinary in that sense.”
Singleton says the SPP welcomes Labour’s forthcoming multi-stage pensions review, and will offer more detailed views on implementation. And for all the talk of change, Singleton says that it is important the SPP works with government, regulators and policymakers on continuing current policies that remain in development. The new Pension Schemes Bill, announced in the recent King’s Speech, makes it
clear that a number of Conservative initiatives, including ‘lost’ small pots, the value-for-money framework and pensions dashboards, look set to continue under the new administration.
Career progression
Singleton has had a long career within the pensions industry. She joined Bacon & Woodrow back in the 1990s, becoming a scheme actuary. “I spent the first 15 years of my career as a defined benefit scheme actuary. But I think I learned it’s more fun trying different roles and developing new skills. A career isn’t just a linear progression.”
Auto-enrolment brought Singleton into the world of defined contribution where she worked with clients to set up these new pension schemes. “I realised DC was a big growth area and a really exciting place to be as it required a much broader skill set. There was more scope for innovation and, importantly for me, the work was much more focused on the end member. I think we always have to have that front of mind when working in DC, that this is an individual’s personal savings we are
looking after.”
Singleton subsequently led Aon’s DC consulting business for five years before moving across to XPS in 2020 to build up the company’s DC business from scratch. “XPS was very much a DB-focused business at the time, but it was growing rapidly.” This growth has continued in the DC space. Singleton is head of DC and now has 40 colleagues working alongside her in DC consulting, supporting clients on a range of areas, from investment, benefits design, scheme governance and member engagement. She says the company continues to innovate in this space, recently launching a new proposition that enables smaller and medium-sized DC schemes to invest in illiquid assets.
Through her work with both XPS and the SPP, Singleton says she has a number of key priorities. One is to improve diversity and inclusion within the industry. “This is something I feel strongly about personally. At the SPP we have a really creative equity, diversity and inclusion committee that is doing some fantastic work.” She says that while efforts have been made to improve gender diversity, this is not necessarily reflected at the top of the industry. She adds: “It is also important to recognise that this is a much broader issue than gender. It’s looking at a whole range of factors, from ethnicity to neurodiversity and ensuring there is proper diversity and inclusion across all areas of our industry.”
Boosting financial resilience
Singleton says she is also very focused on improving financial adequacy, to help ensure people achieve the kind of retirement they are hoping for. With this in mind she says that personally she’d like to see future phases of the pension review take a wider and more holistic view of savings, and include other big issues like social care and even potentially housing. “We need to understand what an adequate retirement income is, and then establish a plan to increase AE contributions over a set timeframe to help people get there.
But I think any review needs to go beyond pensions, and social care is a really important area that needs to be looked at alongside pensions.”
She says that one important way to improve financial resilience and wellbeing is to focus on education. The importance of this, she says, has been repeatedly highlighted by work she does outside the pensions industry, as a trustee treasurer with her local food bank, volunteering with Girlguiding UK, and previously mentoring with Career Academies UK.
“Working at the food bank you can see how a lack of financial education can sometimes comes through. But it is also clear that if we help people to save then they will save. Last year we put in place a Christmas savings schemes that proved popular. People want us to run it over a longer period this year. So you need better financial education, but you also need to put in place tools to facilitate saving, and help those who want to save.”
She cites examples like Nest’s sidecar initiative as a useful template for helping boost financial resilience and engagement, particularly among lower earners.
Financial education is important not only in schools but in the workplace she says. “The early years are really important, but this is a process that should continue throughout an individual’s life and employers are in a great place to help people with this. More employers recognise the importance of financial wellbeing and the role they can play in supporting employees.In many cases this is delivered with the support of pension providers.”
But Singleton says the financial education challenge is huge: an issue that was recently brought home to her by a 12-year-old girl guide. “The girls were involved in an arts and craft activity but sounding off about why they didn’t like maths. I personally loved maths at school but it disengages a lot of people.
“But one of them certainly got to the heart of the matter. She said to her friends that they don’t teach me how to pay rent, how to save money or how to pay taxes. This is a 12-year-old, and she can see she’s not getting the real life learning she needs. I think this is really important — and a vital question that policymakers and the industry need to address. What can we all do to support people and help them build better financial futures for themselves?”