Sexy cash for pensions – Politician nearly loses his patience

Stevie Webb got about as passionate as a politician can get about pensions on Thursday evening. In front of the usual gang of suits he dished the dirt on the Alliance Boots Pension Increase Exchange offer which offers members only 60p in the £1 of their pensions true value in return  for a bit of advice and some “sexy cash“.

Unfortunately for Steve , Alan Higham had seen him coming; Alan’s been even more passionate since  discovering the DWP are offering sexy cash inducements themselves and they are even meaner than Alliance Boots, offering 30p in the £1.

Is Stevie boy an hypocrite? Technically yes, he’s the boss at the DWP and his people are doing the mis-selling so he is been properly caught with his pants down .

Being a woolly Liberal myself , I’ll say this for the boy Steve. “He is a genuine good guy”. No-one would have spent as long championing lost causes as Steve has and not be a true believer. Steve’s problem is that he is – in his own words – an optimist. That seems like a triumph of hope against political reality.

No matter how blameless Stevie may be, he’s only as good as his team. He protests that the DWP and the Treasury are the best of mates; the malpractice exposed like Alan Higham smacks of the DWP getting a little too close to the “dark side”.

  When he gets to read what Alan Higham has written (and Alan is spot on in his analysis) then he’s got two choices.

  1. He can invite Alan round to DWP towers and get the bunch of actuaries behind the DWP cash for pension rip-off to explain themselves – actuary to actuary
  2. He can try to sweep the abuse under the table

Alan Higham’s  potentially Stevie’s best mate, a brilliant man, a consumer champ and one of Britain’s best actuaries:-

let’s see which choice he takes.

To read Alan’s argument – press this link.

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in annuity, corporate governance, customer service, dc pensions, de-risking, NEST, Nick Clegg, pensions, Retirement and tagged , , , , , , , , . Bookmark the permalink.

11 Responses to Sexy cash for pensions – Politician nearly loses his patience

  1. Hi Henry

    What a fantastic write up. I share your sentiment that Steve Webb has his heart in the right place. I’ve tried to engage with Steve but his DWP minders have rebuffed my approaches. These issues are too important to be put off and so we’ll conduct the debate on the internet.

    Government are actively putting barriers in the way of people getting good outcomes at retirement. It causes stress for millions and leaves them much poorer off. They need to change tack quickly. Their fingerprints are all over the case and if they don’t act then there will be multi billion compensation claims many years down the line.

  2. henry tapper says:

    Alan

    If ever there was a case of the Big Society being smothered by Whitehall- totally disgraceful.

    The internet gives us the chance to by-pass their shenanigans and the filibustering of the lobbyists protecting corporate malpractice. (eek! polysyllabic overload)

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  4. Thornton Wells says:

    The whole transfer of DB/enhanced TV values ‘scandal’ is a shame for so many reasons but one of the consequences that sometimes goes unmentioned is that now many IFAs are unwilling to move DB pensions to DC even when this is the best choice. I’ve even had one case where an IFA said that the FSA have banned such transfers!

  5. henry tapper says:

    I’ve had a couple of discrete meesages about Alan’s client. It seems the financial problem is recognised and the issue is not with the cash on offer but with the factors used by the DWP to caluclate the “incremental pension” – to put things simply, the DWP are using out of date factors which make the increased pension option “too good a deal”.

    That’s just the “financial” issue. The issue of perverse incentives (sexycash) is much wider. Almost all the pension offers made to us offer a choice between cash and pension or just pension and the vast majority are weighted towards sexycash.

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