Andy Briggs, chief executive of Standard Life, joins the Big Boss Interview to discuss the war in Iran, pension reform,and the growing risk that millions of people are not putting enough aside for later life.

Briggs says pension savers should not panic about the conflict in the Middle East, arguing that most economists expect short-term volatility rather than lasting structural damage to investments. Standard Life, which looks after 12 million customers and manages more than £300 billion in assets, believes pensions should be viewed over decades. Workplace retirement saving continued through COVID, the Ukraine inflation shock and the Liz Truss mini-budget fallout, because contributions are taken from gross pay before workers see their wages.

Briggs addresses concerns about a potential AI bubble, noting that much of the funding flowing into artificial intelligence is now debt-based, which could create risks if companies fail to generate sufficient cash to service that debt.

The new Pension Schemes Act — the biggest overhaul of the sector in more than a decade — has his broad support, particularly the push for greater scale and investment in productive assets such as infrastructure and growth equity. UK pension savers have generated real returns of around 4% per annum over the past decade, compared with 5.2% in Canada and 5.5% in Australia. The biggest difference, he says, is exposure to private assets. He draws a clear line at mandation, however, arguing that investment decisions should remain a matter of customer choice rather than government compulsion.

Briggs is emphatic that pensions policy needs long-term, cross-party consensus rather than budget-cycle speculation. He points to the damage caused by rumours ahead of Rachel Reeves's budget, when thousands of customers withdrew their tax-free cash prematurely — only for the policy to remain unchanged, leaving those savers worse off.

The current auto-enrolment minimum of 8% of salary is no longer sufficient, he warns, calling for a gradual increase to 12%. Without change, 60% of people could reach retirement in the 2040s without enough for a decent standard of living. The crisis is partly hidden because today's retirees still benefit from defined benefit pensions built up earlier in their careers — a cushion that is rapidly disappearing.

Briggs concedes the UK is "not sufficiently financially literate" on pensions and expresses concern for younger generations struggling to find secure work. Greater pension investment in the UK economy, he argues, could stimulate growth, improve infrastructure and create better jobs — benefiting both savers and the wider economy.

Presenter: Felicity Hannah

01:54 Andy Briggs joins the pod - discusses political upheaval.