The head and the heart

The reasons why people choose the Lib Dems.

I asked Nick Clegg yesterday at conference for some shorthand for what we stand for. What is the liberal language we should be using in our everyday conversation? What's the elevator sell?

I rather like his answer.

"We should answer the call of the head and the heart."

By which he meant that we should deliver the fiscal rectitude the country needs (and Labour can't claim to have delivered) and also ensure that the life chances of every person are never blighted by the circumstances of their birth - everyone should have an opportunity for greatness. The 'caring' territory that the nasty party (not my phrase) would struggle to own.

Now, I'm presuming that core Labour and Tory supporters have nipped straight to the comments section (go on, knock yourself out). But to everyone else, 'the head and the heart' deserves a closer look than just a face value evaluation.

As Nick reminded me, as a party we don't have that cultural reserve of supporters who vote Lib Dem out of a sense of tribal loyalty, choosing us out of an intuitive sense of supporting the group they come from. Of course there is a core of supporters (puts own hand up, waves) who passionately believe in the principals of liberalism. But then there is also a large group who see how we as a party choose to express those principals through policy, and then decide to support us (or not).

Both of these groups have therefore found objective reasons to choose to support the Lib Dems. We don't have that base who support us out of a kind of visceral sense of belonging, which both the Labour Party and the Conservatives can boast.

So ensuring that we follow both 'the head and the heart' means that we deliver policies that both match the creed of liberalism, and the sense of fairness that draws supporters to the party.

We should be a party of hope, not fear and ensure that every child is given the chance to do great things.

You can shout all you like about whether we're delivering or not. I expect you already are.

But as a sentiment to take away from Birmingham, it's a standard I'd happily be held to.

Richard Morris blogs at A View From Ham Common which has been named Best New Blog at the 2011 Lib Dem Conference.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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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: products-and-investments/ pensions/pensions2015/