Net migration up 20 per cent

Figures show that limiting how many can come into the UK doesn’t necessarily translate to a drop in

Net migration to the UK rose by more than 20 per cent last year, according to official figures.

The Office for National Statistics annual bulletin showed that net long-term immigration was 196,000, up by 33,000 from 2008. This brings immigration close to record levels.

The number of people arriving in the UK actually fell slightly, by 4 per cent, taking the number from 590,000 to 567,000. However, this was offset by the number of people leaving -- both foreign nationals and British citizens -- which dropped even further, by 13 per cent.

Why are so many more people choosing to remain in Britain? It's possible that foreign nationals living and working in the UK are concerned about the coalition's cap on immigration. Those with UK work permits or other forms of legal status, but not citizenship or "indefinite leave to remain", might be concerned that if they leave the UK re-entry will be problematic.

UK citizens also stayed put, with long-term emigration falling to 371,000 last year from 427,000 in 2008. Why could this be? Difficult economic times are usually a push factor for people to leave the country. Perhaps, in the recession, fewer people are willing to take the risk, or are keen to hang on to their jobs -- it's all speculation.

What is certain, however, is that this highlights a fundamental flaw in the notion of the immigration cap, which David Cameron claimed would bring immigration down into the "tens of thousands".

Fundamentally, limiting the number of people who can come to the UK does not necessarily translate to a drop in net migration. Quite apart from the issue of EU immigration (which will not be included in the cap), we can see that there are numerous other factors, such as people choosing not to leave.

The number of people granted settlement in the UK between June 2009 and June 2010 also rose by 37 per cent. Of these people, 68 per cent were dependants of those already living in the country.

While the coalition plans to tighten rules on English testing for spouses applying for visas, it is difficult to see how it could feasibly (and humanely) limit the number of dependants coming to the UK. There is an ongoing debate about student visas, too; the number granted in the same period went up by 35 per cent, to 362,015.

It's a complex picture, and one that is difficult to decipher. But these figures certainly demonstrate that arbitrarily limiting immigration will, in itself, do nothing to solve the perceived problems. The consultation on how to put the cap into action ends on 17 September -- it will be interesting to see what the report comes up with.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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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/