Pensions: What others are saying
It would have been odd if Craig Berry – my co-author of the Touchstone pensions pamphlet disagreed – and he doesn’t. In particular he thinks this makes it harder to move to CDC arrangements, not a step on the journey as some critics of the annuity system claim.
But there are some interesting other takes on the announcements that don’t come from the general approach to pensions that Craig, James and I share.
Sky News Economics guru Ed Conway draws out the essentially conservative origin of these proposals and make the obvious link with the Prime Minister’s support for lifting inheritance tax thresholds. They work together to make it easier for people to build up tax privileged assets and then pass them on to their children. The result will be growing inequalities of wealth, already on the increase. I’ve nicked his graph.
Jill Rutter of the Institute of Government has a powerful piece warning of the dangers of making pensions policy by budget gimmick.
And perhaps most interestingly of all, consumer champion Martin Lewis of the phenomenally successful Money Saving Expert, says that the changes will be good for the savvy but dangerous for the majority who are not financially competent and will need a lot more than a one-off advice session to work out what works for them. He too is proud to use the p-word.
“So allow me a good old fashioned bit of paternalism; how do we expect the same people to make the right choice when there are even more options and choices? Never mind the not insignificant group of people struggling with mental health issues or the onset of dementia.”