Morning call: the pick of the papers

The ten must-read pieces from this morning’s papers.

1. David Cameron's well-oiled winning machine is now a car crash (Guardian)

From the NHS to schools, a catalogue of errors and incompetence is undermining confidence in a once-pitch-perfect Tory party, says Polly Toynbee.

2. Mea culpa that reaches right to the very top (Independent)

News International's admission that it was responsible for the hacking of the phones of public figures ranging from a former member of the cabinet to a Hollywood actress represents a seismic moment for the management of Britain's biggest newspaper publisher, says Ian Burrell.

3. What Hugh Grant revealed about the paparazzi and power (Independent)

You wouldn't necessarily expect the most interesting journalism of the week to come from a film star and his ex-girlfriend, writes Christina Patterson – referring to this New Statesman piece.

4. A misbegotten idea that will prolong the reign of the old boys and elites (Independent)

Nick Clegg sometimes just listens to music and cries, he told Jemima Khan in an NS interview this week. We all know the feeling when we hear about his throughts on social mobility, says Michael Bywater.

5. Ditch the spin-cation. We like flash hols too (Times) (£)

Cameron shouldn't feel obliged to fly Ryanair and stay in cheap hotels, says Janice Turner.

6. I just can't see Berlusconi flying Ryanair (Telegraph)

Compared with the comic turns in other countries, our leaders seem such a dull lot, says Matthew Norman.

7. It's not our job to save the euro (Telegraph)

The failure of the euro will signify the ultimate failure of the European ideal, says Simon Heffer.

8. Our revolution's doing what Saleh can't – uniting Yemen (Guardian)

Yemen's struggle to overthrow the president has brought stability and peace to a country riven by conflict, says Tawakkol Karman. This is truly historic.

9. Can we really judge the past by the present? (Times) (£)

Matthew Parris on the brutality of empire – and the cover-ups which show that colonial officials knew their actions were wrong.

10. One year on: the sun is shining, my life is starting again (Times) (£)

The Times columnist Melanie Reid broke her neck 12 months ago. Now she's back home.

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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/