Cameron's housing benefit proposals are part of an ongoing redefinition of adulthood

PM continuing is a trend of assuming people in their twenties are still basically teenagers.

This isn't just about welfare. It isn't just about saving public money. It certainly isn't just about the feckless and workshy breeding on the state. David Cameron's desire to remove housing benefit from (almost) everyone below the age of 25 might be evidence – depending on where you're coming from politically – of populism, of the re-emergence of the "Nasty Party" or of some long-overdue tough love. But I would put it in a wider social context. I would ask: why it is happening now?

Cameron says that he wants to tackle a culture of dependence upon the state. What he seems to want to replace it with is dependence of children upon their parents well into what most would consider adulthood. He praises the couples who live (usually apart) in the family home until they can afford to put down a deposit on a house, a dream which may be forever beyond many of today's young people. He damns those who start their families early, before they have the wherewithal to support themselves and their offspring through their wages alone.

Of course, the rhetoric contrasts the feckless unemployed "scrounger" with the "responsible" twentysomething (or perhaps even thirtysomething) who works all day and then comes home to Mum and Dad. As the prime minister must be well aware, however, the majority of housing benefit claimants are in work. And that includes those who are under the age of 25. The benefit bill has mushroomed because rising house prices and rent levels have prevented an increasing number of working people from affording homes without help, whether that help comes from the state, from parental loans or from the ability to live in the parental home effectively rent-free.

In such a generationally skewed market, housing benefit might well be seen more as an aid to achieving independence and adulthood than as a form of dependence upon the state. To be able to leave the family home is a prerequisite to being able to travel to find work. It thus encourages self-reliance, self-esteem and a spirit of positive engagement with the world. Conversely, being forced to stay at home in adult life risks inculcating fatalism, depression and social as well as geographical immobility. Not to mention social friction, embarrassment, sexual frustration (not all parents are happy for even their adult children to sleep with partners in the family home), resentment and a sense of failure.

The true purpose of a safety net is not just to catch people when they fall, but to give them the confidence to jump. 

Of course it's unfair that some young families are accommodated with the help of the state while other young people cannot afford to leave home and start families of their own. I can see how this can lead to resentment. But it's hard to see how unfairness is eliminated by making things unfair for everyone. What is needed is a properly thought-out strategy for putting housing within the reach of younger people who don't work for investment banks or have trust funds to fall back on.

As I suggested at the beginning, though, this is about more than just housing benefit. To propose 25 as a qualifying age for help with rent is to imply that, whatever their circumstances, anyone below that age is not really an adult. In effect, it is to extend the concept of adolescence into the mid-twenties. It is to say that under-25s are too young for responsibility, too young to have lives and children of their own. Twentysomething pregnancy is the new teenage pregnancy and poorly-paid young workers are the new NEETs. Cameron's latest proposal does not exist in a vacuum. Recent years have seen such nonsenses as "Challenge 25", a draconian response to the declining "problem" of underage drinking that subjects people of clearly legal age to the ritual humiliation of producing ID at supermarket checkouts. One might note the demographic category of 18-25 itself, originally a marketing tool that assumes that people in their twenties are still basically teenagers. Indeed, it has increasingly been supplanted an 18-34 demographic, truly an ominous sign.

A society in which mass higher education is the norm is going to think rather differently about growing up than one in which most children leave school at 16 and enter the labour market. But the biggest contributory factor to delayed-onset adulthood is surely economic: the accumulation of capital in the older generation. The middle aged and the elderly have all the money and most of the power. This is not necessarily good news for them. The flip-side of extended adolescence is extended parenthood. To force younger people to live at home is also to force middle-aged people to continue to fund and support their offspring. If adult children are unable to begin their independent lives, their parents are equally unable to resume theirs.


The changes to housing benefit will see children move back in with parents. Photograph: Getty Images
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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/