Catching the wind

How the irregular energy supply on Fair Isle can leave you feeling like you're in a "very slow and i

For newcomers to this island there are some things that take just a bit of getting used to; power, for example.

When I arrived in Fair Isle I had, like most people, always enjoyed a reliable and consistent source of electricity. When I woke in the morning I could turn on a light, listen to a CD, heat my porridge in the microwave (though I wouldn’t necessarily recommend that method). And if I wanted to stay up all night doing these things, all I needed was the will.

Here things are slight different. Our electricity comes from two sources: diesel-burning generators and wind power. We have two aerogenerators (that’s windmills to the uninitiated) – a 60kw mill and a 100kw. When the wind is sufficient to provide power to all the houses on the island then that is what happens; when the wind drops, the diesel generators take over. There is, however, a gap of between 10 and 30 seconds for the changeover, meaning that some evenings feel rather like being in a very slow and irritating disco, as the lights go on and off every few minutes.

Wind power is by far the preferable option. Not only is it greener, it is also cheaper, and it’s available for 24 hours a day. The diesel generators, on the other hand, are switched off between 11.30pm and 7.30am, meaning that all-night parties are restricted to breezy nights. This is an inconvenience that is quickly adjusted to, and in fact I have come to rather enjoy reading by candlelight.

I have written before that Shetland is a windy place, and so it is. A very windy place. This weekend, like much of the UK, these islands have been battered by severe gales, with winds reaching to almost hurricane force early on Sunday morning. Wind is an abundant, renewable energy source, unlike diesel, which, along with heating oil and gas for cooking, must be shipped into the island in barrels and canisters on an all-too-regular basis.

The first Fair Isle windmill was put up in 1981, making it the earliest such project in the UK. Both the mills and the generators are owned and maintained by the Fair Isle Electricity Company, which is run entirely by islanders. It is a local, community solution to our energy needs. It is unfortunate that, at this time, diesel is still required to power the island for a good proportion of the time, but when another option becomes available I’m sure it will be taken.

Necessity breeds innovation, and it is in places like Fair Isle where necessity is most keenly felt. Perhaps that explains why the move towards renewable energy has been so slow in the UK. You flick the switch and there is light; if you want gas then it will come through a pipe straight to the cooker; power cuts are a rare inconvenience. Why would you want to rock the boat? People are so disconnected from the production of what they consume, whether that be food, goods or power, that they come to see it as almost a kind of magic: beyond their comprehension or concern.

Human beings are incredibly good at ignoring reality. If the weatherman says rain then the umbrella comes out, no matter how blue the sky. And equally, when all the evidence points towards the fact that we must, must, change our attitudes towards energy consumption and waste, it is met with collective shoulder-shrugging and grumbles at increased fuel tax. But if we all wait until no other option is available before we change our bad habits, it will, perhaps, be too late.

Photos by Dave Wheeler

Malachy Tallack is 26 and lives in Fair Isle. He is a singer-songwriter, journalist, and editor of the magazine Shetland Life.
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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/