Charles hailed for pensions warning
The Prince of Wales has been praised by pensions experts and older people's campaigners for warning that the retirement industry risks becoming "unfit for purpose" if it fails to adjust to the effects of an ageing population on the environment.
In a pre-recorded speech, Charles told pension funds that "your grandchildren, and mine for that matter, will be consigned to an exceptionally miserable future", if the sector merely concentrates on the short term.
Charles urged investors at the National Association of Pension Funds' (NAPF) conference in Manchester "to help shape a system designed for the 21st and not 19th century" by improving their approach to social and economic changes.
The Prince's comments follow a report from independent pensions expert and former Downing Street adviser Ros Altmann, which earlier this week called for an overhaul of pensions and argued they are " not fit for 21st century lives".
Dr Altmann backed Charles's comments, saying: "Pensions are meant to deliver long-term value. What we don't want is to get hijacked by the short-term and sell our children's future away."
She said she hoped the Prince's comments will have an impact, adding: "It's clear that we need to make some changes. We are living for today in a dangerous way."
Dr Altmann said she could understand why for political reasons there is a strong focus on short-term growth, but pension funds should not be operating on the same timetable.
She said: "The short-term attitude of bankers and traders led us into the crisis because they thought: It's alright at the moment so we don't need to worry."
Up to nine million more pension savers are expected to be created over the next five years as the Government's landmark reforms roll out to place people into workplace pensions automatically amid fears that people are living for longer but failing to put aside enough money for their old age.
Official figures recently showed that the number of private sector workers saving into a company pension fell to an all-time low of 2.7 million last year.
Paul Green, director of communications for over-50s body Saga, said Charles is "absolutely right" to speak out.
He said: "Whilst the heir to the throne may have a secure future, many of his potential subjects have something altogether less savoury in store for their retirement.
"The pensions and savings industry together with Government need to step up to the mark and provide good-value, long-term, flexible and secure savings and equity-release solutions. Long-term sustainability must be at the heart of the nation's plans for an older society."
Although he is known for his views on the environment, it is a rare for the Prince, who turns 65 next month, to comment on financial matters.
Charles told those who attended the conference yesterday: "I don't think you need me to tell you that we live in increasingly uncertain times. We are facing what could be described as a perfect storm.
"The combination of pollution and over-consumption of finite natural resources, the very real and accumulating risk of catastrophic climate change, unprecedented levels of financial indebtedness and a population of seven billion, that is rising fast ."
Charles told pension funds they have "a need and arguably a duty, to ensure that these emerging environmental, social and economic risks are identified and managed".
He continued: "With an ageing population and pension fund liabilities that are therefore stretching out for many decades, surely the current focus on quarterly capitalism is becoming increasingly unfit for purpose."
Charles said there is mounting evidence from business schools that those companies that improve the way they tackle environmental and social challenges are the ones better able to deliver long-term returns - "so you can have your cake and eat it".
He said: "I know that old habits die hard and that it is difficult to make the first move, but is there not a case for ensuring your portfolios are resilient in the long term? Could you do so by incorporating sustainability into your mainstream strategy?"
He added: "It really does fall to you (pension funds), I'm afraid, to help shape a system designed for the 21st and not 19th century.
"Which is why I can only urge you to deploy your considerable human ingenuity to make that innovative and imaginative leap that the world so badly needs, otherwise your grandchildren, and mine for that matter, will be consigned to an exceptionally miserable future."
Joanne Segars, chief executive of the NAPF, welcomed Charles's comments for "shining a light on these issues".
She said: "We all know that the Prince of Wales has been concerned about sustainability and environmental issues for many years.
"The NAPF believes that these are also of significant importance to long-term pension fund investors and are the basis for long-term investment success and hence the provision of good pensions for people in the future."
Business Secretary Vince Cable has already criticised traders in equities markets for going after a "quick buck" rather than looking for sustainable returns through responsible capitalism.
The Office of Fair Trading recently raised concerns about people's money being placed into rip-off pension schemes. It found that up to £40 billion of pension savings could already be in schemes which are delivering poor value or are at risk of doing so.
Most employees do not understand their pensions, the OFT found, describing them as "complicated products, the benefits of which occur, for many people, a long time in the future".
The Association of British Insurers and the Pensions Regulator are working to improve the scrutiny of schemes and make sure people are getting good value.