John Major is right - in education, money still buys a better chance of success

Britain has a clear and shameful lack of social mobility, and private, fee-paying schools are symbolic of the wider link between how much money your parents have and how much opportunity you’re given.

I’ve said it many times. If you want someone to attack inequality in opportunity, go to a Conservative Prime Minister. John Major, that well known class warrior, has come out with some strong words on the way the wealthy in this country keep a hold on positions of power.  

"In every single sphere of British influence, the upper echelons of power in 2013 are held overwhelmingly by the privately educated or the affluent middle class," he said this weekend. "To me, from my background, I find that truly shocking."

"Our education system should help children out of the circumstances in which they were born, not lock them into the circumstances in which they were born”, he went on. “We need them to fly as high as their luck, their ability and their sheer hard graft can actually take them.”

I think, at this point, little of what John Major said comes as news. Britain has a clear and shameful lack of social mobility. Private schools are far from the only factor in that problem, but they stick out, symbolic of the wider link in this country between how much money your parents have and how much opportunity you’re given.

Yet even this most obvious of mechanisms goes ignored; itself, it seems, symbolic of the blind eye we turn to the avenues of power that keep things as they are. When it comes to the hold of private schools on every position of advantage in this country, most of us seem locked in to some sort of selective amnesia. We know what happens. Many of us are sure it’s far from fair. Few are willing to actually come out against it. The fact that private schools are still given the tax relief saved for charities is suggestive of our collective willingness to be the butt of the public school system’s joke.

We’d be disgusted if it emerged a parent had bribed the admissions tutor at Oxford University to allow their child to attend. We are somehow meant to accept it when they buy their child an education that vastly increases their odds of being offered a place. Private school students are 55 times more likely to be given an offer for Oxbridge. Five schools send more there than 2,000 others combined. Either the working class are stupid or the people who have more money are using it to ensure their children have more chance of success.

And why wouldn’t they? Parents want the best for their child and it’s their right to do what they can to help them achieve it. Freedom is often presented in this way as limitless, as if societies give it free reign regardless of how one person’s freedom harms others. There are limits to what a parent can legitimately do to help their child succeed. If there weren’t, there would be no laws against a father stealing a laptop to make his son’s homework easier or ethical problem with a mother taking her daughter’s A-levels for her. The decision is where we want to draw the line between parental partiality and our hopes for equal opportunity. Somewhere along the way, we’ve decided private schools fall within the realms of acceptability. Power buys power. The status quo is strangely attractive, even when it’s harming most of us.

Education, at its most practical, equips children with the chance to get the best from their life. Our education system just gives some better chances than others.  If we decide that we want an economy where there are unequal rewards, the least we can do is ensure each child has a fair chance in the competition for those rewards. Maintaining the private versus state school divide is like giving one child a stick and another a sword and acting surprised when the stick snaps in two.  

Even the weapons we’ve told ourselves make the fight a bit fairer are now being bought up by the people who don’t even need the help. The Sutton Trust released a report last week that showed the wealthy and privately educated in fact have a hold on grammar schools; the supposed mechanism for the smart working class to make it to the top. More than four times as many grammar school pupils come from outside the state sector than the number entitled to free school meals. The vast majority, funnily enough, come from fee-paying prep schools.

The problem is clear. The question is whether we want to do anything about it.




Eton College, where students leave with a significant advantage. Photo: Getty Images

Frances Ryan is a journalist and political researcher. She writes regularly for the Guardian, New Statesman, and others on disability, feminism, and most areas of equality you throw at her. She has a doctorate in inequality in education. Her website is here.

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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/