My friend David Harris got the great, the good and me in an upstairs room in Benjamin Franklin’s old house in Craven Street last night. We discussed what pensions would be like in 2020, my ideas are on this blog – suffice it to say that 90% of the attendants were linked in to the Pension Play Pen , so there was the usual cronyism from one and all.
Fortunately there were some top journos in the little room including the legend that is Padraig Floyd. Padraig was particularly truculent , dishing out stick to all and sundry and getting stuck in to most of the speakers for trotting out platitudes about “good retirement outcomes“.
Padraig is of course right, no sooner is a phrase such as that coined than it becomes the lazy man’s intellectual armchair into which he can recline in complacent posture.
I was annoyed with myself for being amongst the speakers who’d jabbered on about good outcomes. Padraig made the distinction between what we might consider “good” – sufficient to keep the general public off our backs, and what the public felt good that undetermined amount of money that is the difference between financial happiness and misery.
Without rehearsing old ground, the amount that needs to be in one’s pocket to have a good time has never been established. Though another friend, Ben Jupp had a try a decade a go and got the likes of Frank Field to sign up to the idea that a minimum income in retirement that we might apply “reasonable force” on people to achieve was then £8,500 (revalued today to around £11,000).
Ben’s argument, which has never been refuted, is that it is the proper role of Government to ensure that its citizens provide sufficient for themselves that they are not a burden on the next generation.
So, with due apology to Padraig, for sloppy thinking and feeble articulation, I assert that to me “Good Retirement Outcomes” are outcomes that allow people to retire self sufficiently with a minimum of £11,000 in their hands.
£11,000 being around the 0% tax threshold and some 3/4 of it coming from the upgraded state pension (provided David Cameron doesn’t nobble it), I think that the auto-enrolled pension most people will receive, will go a long way to filling the gap of some £3,500 per year, certainly if they’ve got ten or more years to retirement and use a half-sensible retirement saving scheme.
Here I am with the Government in stopping short of absolute compulsion. Reasonable Force should be applied to ensure the majority get there but we cannot call force “reasonable” that has no element of freewill about it. God gave Eve her window of opportunity and she jumped straight through it and out of the garden.
Where I disagree with Padraig, who has a stentorian attachment to compulsion and high levels of contribution, is in the severity with which the remedy is applied.
“Good Retirement Outcomes” need good retirement schemes and good levels of contribution. They also need the support of the population. The biggest task we face is in ensuring we have the blessing of the UK public for what we are endeavouring to do and here Padraig is absolutely right.
The use of Pension babble will endear us to no-one. Thank goodness for proper pension journalists who remind us of that!
- Can pension saving really grow the economy? (henrytapper.com)
- Why a £1m pensions lottery could make saving for retirement more fun (confused.com)
- Brits turn to family & friends for pension info – Confused.com (confused.com)
- Transferring pension pots to be made easier – Confused.com (confused.com)