The comeback kid. Photo:Getty
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Why the Tories still have a spring in their step

Senior Conservatives are drawing comfort from Binyamin Netanyhu's late comeback in the Israeli elections.

Why aren’t the Tories more worried about the course of the election campaign? In the autumn of last year they were predicting they would take a lead by Christmas. Then January. Then the Easter Weekend. Now the promised moment when the electorate looks at the whites of Ed Miliband’s eyes and returns to the loving embrace of David Cameron has been delayed until the last ten days of the campaign.

Simon Heffer, who writes in the NS this week, suggests that the Conservatives are drawing hope from an unexpected source - the Israeli elections. Binyamin Netanyahu had been expected to lose until the last days of the campaign, when he turned it around in the last few days with anti-Arab rhetoric and a return to Netanyahu’s favoured issues of security and defence. Senior Conservatives now believe that an equivalent focus on the threat of Miliband propped up by the SNP will have the same effect on Ukip-aligned voters and soft Labour supporters. That the polls in Israel underestimated the scale of Likud’s support has also put a spring in Tory steps, who still hope that Labour’s vote share will be below that of the polls.

Of the mood among the Tories, Heffer writes:

Candidates know the campaign must be ‘turbocharged’, not least because of its length, with punters bored and the players exhausted. ‘There was a calculation that Miliband would bog it,’ one observed. ‘He hasn’t – yet – so we must think again.’ And despite the obstacles to a pro-Tory majority, a minister invited comparison not with 1992, but with the recent Netanyahu victory in Israel, which polls had discounted.

That victory happened only by Netanyahu warning of Arabs taking over Israel. Will Cameron warn of the Scots doing the same to England?”

Are the Tories right? What is certain is that the SNP attack line is certainly starting to cut through on the doorstep and is spooking Labour candidates. But whether or not it will actually shift opinion is another question. Netanyahu was able to draw on a reputation – or a rap sheet, depending on your perspective – of toughness and aggression toward’s Israel’s enemies. Cameron simply isn’t seen in the same way by British voters. Remember, too, that Israeli polling is much more volatile than Britain’s. The quick answer is that it’s too early to tell whether or not the Tories will succeed in overturning the odds.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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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/