A democratic Duty of Care

There are certain financial numbers that are relevent to all of us on a daily basis. Principally defined as “bank balance” “bills” “pay packet” and “wedge” in wallet/purse. These relate to our day-to-day cash flows and determine what we can afford to do.

There are a second set of numbers about things like “value of house”,of savings and of our business (if we own one) that determine the strategic choices we make on where we live, how we work and what kind of lifestyle decisions we take for ourselves and families.

Finally there are the “what if” numbers – the what if I die, get sick or make it through to old age numbers- these are the stuff of financial planning.

For most of us , the further the time horizon, the more we are inclined to delegate responsibility . When it comes to the financial planning numbers we rely on our employers (specifically the HR departments ad trustees of our pension schemes) or on insurance companies, we may also delegate to financial advisers to help us take choices.

What we are asking for is that we know what’s going on and that there are no nasty surprises. By delegating we get rid of the clutter of small decision making to our banks, mobile phone companies, insurers and pension managers.

When things go wrong and we get a nasty surprise our first response is t ask “how did that happen” and “whose fault is it”. I’ve mentioned that I’ve recently had a £3000 vodaphone bill that arose because my son left his iPhone on full roam for two weeks in South Africa. I am responsible for that bill but I am arguing that Vodafone had a duty of care to inform me that there was unusual activity on one of my accounts. Vodafone and I will have a quiet conversation as to whether they exercised their duty of care. If we can’t agree then we can go to arbitration through a regulator an if we still can’t agree we can go to court. These mechanisms exist because of the highly developed systems of consumer protection in the is country which give us protection when things like this happen – that’s why most of us sleep easy in a very complex world!

Because of Britain’s extraordinary culture of fairness, there is an inbuilt balance in our society based on the common law principles that underpin government. Fairness is something we expect and rely on. When there is a breakdown in behaviour, as happened when our banking system spiralled out of control in the years leading up to the credit crunch, society regroups, re-establishes governance procedures and move on. We don’t throw our toys out of the pram.

Part of what I do as a pensions professional is to help ensure that people get what they ar expecting from their pension funds. This ranges from contributing to the big debates on how pensions are established, taxed and delivered to the minutiae of operations of the pension schemes we use. I am one tiny cog in  a very big mechanism that relies on all the tiny cogs working harmoniously to a common purpose.

This may seem platitudinous , but when you step back from these day to day operations and ask yourself “are we doing a good job” you realise just wha a fine society we live in. A society that has evolved over time to ensure that there are checks and balances that keep people from destitution, that correct the rape and pillaging of oligarchs and maintain a system of fairness on which we so much rely.

Over the next four weeks we are going to see what seem major changes in the governance of our daily lives- arising from the spending review being carried out by our appointed representatives. As the impact of the proposed cuts we know our coming becomes clear, issues relating to our cash flows, our immediate capital and our long-term planning will seem huge to us.

We will undoubtedly question whether the Duty of Care those in power have been charged to exercise has been properly conducted and we will almost unanimously find fault with some aspect of the changes we will see.

My confidence that a just and equitable settlement will be reached is based on my unwavering belief in the value of British Society to ultimately deliver a fair solution. That is because I feel a part of that solution- a small cog in the mechanism. Democracy.

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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