Prince Charles warns of risk to future pensions

In a message recorded for NAPF, the Prince of Wales said portfolios must be "resilient in the long term" to avoid a "miserable future"

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The Prince of Wales has told the pensions industry to use a longer-term investing approach or risk a "miserable future" for the next generation.

He warned a National Association of Pension Funds' (NAPF) conference that the current focus on short term investing was "unfit for purpose".

Prince Charles said the pensions industry was vital for the economy "now and in the future".

The NAPF said it was "pleased" he was "shining a light on these issues."

Prince Charles cited "mounting evidence" from Harvard and London Business Schools showing that businesses willing to improve their approach to environmental and social challenges were more likely to deliver long-term returns.

The prince said investors had a "duty" to manage risks from rising populations, climate change and "unprecedented levels" of financial indebtedness, he said.

He added: "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."

NAPF chief executive Joanne Segars said sustainability and environmental issues were important to long-term pension fund investors, and were the basis for providing good pensions for people in future.

'Living for today'

Former pensions adviser to the government Ros Altmann agreed with the prince's comments.

She said: "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."

Ms Altmann said it was "clear" that changes needed to be made.

"We are living for today in a dangerous way," she said.

She said she understood why the short-term focus existed for political reasons, but that pension funds should not be operating on the same timetable.

The government will enrol up to nine million more people in pensions during the next five years as fears grow that people are living for longer but not saving for their old age.

A spokesperson for Saga, a company that focuses on the over 50s, said Prince Charles was "absolutely right" to speak out.

He added: "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."

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