Gordon's retribution, Chavez's defeat

The PM gets his own back for Vince Cable's Mr Bean jibe and the blogosphere rejoices as Chavez loses

With Vince Cable’s Mr Bean jibe still ringing in many MPs’ ears, PMQs provided the PM with an opportunity to bite back. Adam Boulton describes the scene: “Vince Cable got lost with lacklustre questions on Northern Rock. Brown got his own back for Mr Bean suggesting Cable was ‘better at jokes than economics’. No pretty footwork but the prime minister was still on his feet at the end of the half hour.”

As the Labour Party funding fiasco continues to niggle the government, Luke Akehurst took offence to a Yasmin Alibhai-Brown article in the Independent which suggested the Labour Friends of Israel were somehow involved. Akehurst describes the article as “winner of most idiotic and unhelpful contribution to the debate on Party funding”, and concludes: “I cannot understand what, other than anti-Semitism, would motivate someone to write a whole column whose only hook was the shared ethnicity of David Abrahams and Jonny Mendelsohn.”

Over in Venezuela, President Chavez narrowly lost a controversial vote that would have changed the constitution to allow him to be re-elected. The condemnation of his attempt, and rejoice at the outcome of the vote, was widespread across the UK political blogosphere.

David T at Harry’s Place writes: “I think Chavez is more of a fool than a monster. Perhaps he is not as bad as some of his strongest critics hold. Nevertheless, I find the adulation heaped upon this rather comic man - more of a Peron than an Allende - in some parts of the Left difficult to understand … This result illustrates that Venezuelans have an affection for a robust democracy, and prefer to keep their leaders on an electoral leash to government by coup.”

While Lenin’s Tomb is more sympathetic, seeing the result not so much as anti-Chavez as more pro-democracy: “The reality is probably that Chavez’s supporters were simply unwilling to turn out to vote for a constitution among whose main priorities was to enhance executive power. This was always the most problematic aspect of Chavez’s reforms. Unfortunately, this result will probably strengthen the rightist opposition, despite the continuing popularity of Chavez and his other reforms.”

Finally, on Monday Iain Dale announced he would be leaving 18 Doughty Street to concentrate on launching a new political magazine and write a book. Let’s hope it does not interfere with his blogging duties.

Owen Walker is a journalist for a number of titles within Financial Times Business, primarily focussing on pensions. He recently graduated from Cardiff University’s newspaper journalism post-graduate course and is cursed by a passion for Crystal Palace FC.
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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: www.oldmutualwealth.co.uk/ products-and-investments/ pensions/pensions2015/