Putting a stealth tax on an employer’s wage bill of 3% and frog-boiling millions to reduce their take home by up to 4% doesn’t fit comfortably with a growth strategy for the economy.
Less money to spend.
Many regard UK pension policy and in particular the introduction of auto-enrolment as an impediment to growth.
I think differently and my experiences of the past couple of days reinforce my belief that UK pension policy is set in the right direction and, with the support of those who need to implement it, could do much to assist Britain’s economic recovery.
I’ve just come back from Holland where I was meeting pensions experts from all over Europe, but particularly from Holland. I was wanting to find out how confident the Dutch are in their pension system and what we could take from their way of doing things.
I was pleasantly to find the Dutch relaxed and confident in their pension system. Pension saving for them is the solution not the problem as was explained to me by one consultant who made three important claims
- At a time of economic strain, the solidarity of Dutch collective pension saving is a social comfort – they really do feel they are all in it together
- The effectiveness of their pension savings system is something they are proud of – I did not hear any moans about pension mismanagement from any of the Dutch
- They consider pension funds, as source of funds for those wishing to grow their economy.
Again and again, I heard of Dutch investment projects designed to cut out the banks and provide direct finance to those wishing to build houses and plants, invest in research or simply scale up businesses in anticipation of increased demand.
Because the Dutch have this collective mentality, they are prepared to share ideas with each other and with people like me in the hope that everyone will raise their game. This is quite different from the UK system where all to often we find the emphasis is on creating opportunities at the expense of others – typically the UK taxpayer.
This sense of mutual self-confidence supports a different approach to pension outcomes. Whereas in the UK, we feel the need to guarantee and regulate those guarantees, the Dutch ae prepared to accept that when times are hard, expected benefits may have to reduce, there is a real likelihood this year that many pensioners will get more rather than less pension than last year. However, as the same consultant was quick to point out, even the reduced pension would be considerably higher than a pension that had to be guaranteed in the way that pensions are guaranteed in the UK.
You may think I’ve spent two much time in Amsterdam coffee-houses, but I know success when I see it. My glasses are rose-tinted because what I saw in Holland were people in pensions who were confident that they were doing all they could for the members of their schemes , doing it with an eye to the wider social good and they seemed confident that they were at the vanguard of the Dutch economy‘s revival.
There weren’t many guests in our hotel, but the Dutch football team were a few of them – in advance of their game against Turkey. I shared a lift with Robin Van Perfect and thought to engage him on penalty taking – but (apologies to Saints, Scousers and Blues) I changed my mind and congratulated him on his hatrick. It seemed churlish not to!
That’s what a couple of days in the company of positive people can do for you! Let’s hope that a little of that Dutch optimism, collectivism and determination can rub off on us!
- So you want better pensions? (henrytapper.com)
- TESCO extra pensions (henrytapper.com)
- Why can’t we select a pension like we buy a car? (henrytapper.com)
- “The Employer’s Duty” (henrytapper.com)
- The importance of saving into a pension early (justsave.co.uk)
- City Comment: Here’s how to solve pension problem, Ed (standard.co.uk)
- Fees that can halve the value of your pension (telegraph.co.uk)
- Report: Pensioners worried about retirement funding (gateway-homes.co.uk)