Turning the pension savings gap into a savings lifeline
In 2015, I experienced something of a personal crisis in response to world events – austerity cutbacks, a climate crisis, refugees dying on our shores. My search for answers led to a realisation that businesses could and should play a larger role in helping solve the world’s problems. This was at a time before impact investment was cool and before BlackRock CEO Larry Fink was inviting his fellow CEOs to act.
My epiphany led me to take the stage in Boston for a Ted Talk. I used my seven minutes of fame to share a simple idea about how businesses could play their part in achieving the UN’s Sustainable Development Goals. Stepping off that stage, I knew that I wanted to help solve one of these problems myself.
An industry in crisis
It turned out the problem was right in front of me. I was working in an industry in crisis: pensions. Twenty million Britons are not saving enough for retirement. In addition, almost half of all UK adults have under £500 set aside to handle unexpected expenses. This savings challenge is massively impacting people’s quality of life.
This is not a hidden problem, however. A week doesn’t go by without a headline mentioning the scale of it: Britain’s great pensions crisis and House on fire. When The Sun starts talking about a problem and offering solutions, it must be pretty serious!
If people know they need to save more, why aren’t they? And can we use technology and behavioural science to help them take action? Spoiler alert: yes. In fact, this is the central plank that Maji was built on.
Two important market happenings have created a powerful tailwind for Maji. Likewise, they signal good news for pension savers across the UK.
Auto enrolment: Pension auto-enrolment has brought 10 million people into Defined Contribution (DC) pensions. Many of them are saving into a pension for the first time. Yet, it’s a product that few really understand. And there isn’t much guidance available from employers, the government or pension providers. Pension savings as part of overall employee financial wellbeing was once something that only the largest employers thought about. Now, auto enrolment has made it front of mind across all companies, including SMEs and startups.
Open banking: Open Banking, which enables amalgamation of consumers’ banking data and the provision of automated payment services, is informing the work of the government’s pensions dashboard. The pensions dashboard will offer a single place for people to track all of their pension pots. (Until then, Maji can do that for you.) And the Financial Conduct Authority (FCA) is seeking views on Open Finance. Open Finance would extend Open Banking data-sharing principles to enable consumers to connect any financial product they own, including savings and investments, to third party providers across a broad range of financial sectors and products. This would enable the provision of advice and guidance through technology that is truly personalised to an individual’s circumstances.
“Maji literally has the power to change lives by solving for one of society’s biggest problems.”
The origin of Maji’s name
Maji (pronounced MAH-jee) stands for trust and respect. It was clear to me from the very beginning that Maji’s core values centred around these two very important values.
Firstly, trust because of the information people share on our platform. Our users need to trust us with their financial hopes and dreams, safe in the knowledge that we will never share their personal information with anyone else. Secondly, respect because everyone’s situation is different. We’re committed to working within people’s personal boundaries, circumstances and comfort zones to help them achieve their long-term financial goals.
Around the time Maji was coming together, I became a first-time dad. One day, my son was crying his head off. Nothing I did calmed him down. Then his mom picked him up. Within seconds he was calm. At that moment it struck me that when we’re born, the one person we intuitively trust is our mother.
“Ma” is an informal name for “mother”. For me, there was no greater word that could signify trust. For respect, I took inspiration from India where “Ji” is added to a person’s name as a sign of respect. When I combined them into Maji I knew I had a name where the company values would always be front and centre of the business
The power to change lives
Maji literally has the power to change lives by solving for one of society’s biggest problems. We aim to help people take control of their financial life, starting with pensions.
Today, Maji is available to people through their employers and Maji financial partners. Later this year, individuals will be able to sign up for a Maji account directly. Maji is for anyone who wants help to understand their pension and learn how to maximise their pension savings. No matter where someone is in their retirement savings journey: just starting, not yet started, or a long-time saver, Maji has tools and coaching to help them make the most of their pension.
To sum it up, we envision a not-so-distant future where we turn the current pension savings gap into a savings lifeline that gives everyone the dignity, and the luxury, of a financially secure retirement.