This article is full of generalisations. See if you can spot how many.
What an interesting period it’s been following the budget and George Osborne’s announcement of the intention to allow pensions to be taken in one lump.
The debate seems like it might settle into to two main camps. On the one side those who want personal choice. On the other side those who think people need to be protected from themselves.
To put it another way, those in favour of complete access to the pension fund tend to like the idea of taking their own pensions. Those who prefer to tell the public what to do with their money tend to be thinking of the longer effects on society rather than their own position.
Isn’t the political system a bit like this? A vote for a right of centre party tends to mean personal choice; lower taxes; take your whole pension fund if you want; why should The State tell me what I should do.
The Right would like personal choice to be able to “get a Lamborghini, and end up on the state pension” (according to Steve Webb, the Pensions Minister, a statement defended by the Government). And yet they would reduce benefits for the unemployed and disabled in order to force them back to work. That’s not actually very pro-personal choice, is it?
A vote for a left of centre party tends to focus on investment in the State, supporting the vulnerable and the weak. They tend to get voted for by the vulnerable and the weak. And many others who like the idea of the supporting the vulnerable and the weak. And plenty of others who aren’t vulnerable or weak but want to take advantage of the system. Which irritates the hell out of those of us who have to pay for it.
So, we tend to vote for a system that best suits our own circumstances, even while believing that our ideology is based upon an impartial view of the world.
Is it actually possible to be impartial? Would a totally subjective view of the situation conclude that personal choice is paramount, or that the long term effect on the economy of the nation is more important?
Try and answer that question without any reference to ideology, to your belief system. Without reference to how your parents voted, or your own financial position. It’s almost impossible to do.
If I try my hardest to make such an assessment, I come to the conclusion that I like the idea of the State being there to ensure no-one starves when they stop work, but it should not encourage people to waste their money knowing the State will be there to bail them out. Something that could be achieved by auto enrolment, relaxed regulation around Drawdown, and an overhaul of the annuity market. NOT by allowing complete freedom to access the pension fund.
No-one was forced to put money into a pension and receive tax relief. That has been and remains a personal choice. And it has been one based upon the knowledge that pensions are for income and could not be accessed in one lump sum. So don’t give me any more of that restriction of liberty stuff when referring to pensions, and instead debate how pensions can best be structured for the good of society over the next 50 years.
Chris has written a novel which doesn’t have any politics in it whatsoever. Click here.