We should be proud to have an opt-out!

An old friend of mine tweets me beginning “I’m a libertarian but…!” The but is an objection to the feckless being able to opt out of their pension plan.

Of course she is a fascist though you cannot tell her that any more than you can tell an alcoholic that their liver looks like a deflated pin-cushion.

Instead you must be kind, and say kind things about their parental attitude (don’t say paternalistic especially if they do the diversity thing).

Pension fascism is very common and stems from a misguided paternalism – oops parentalism that is embedded in trusteeship. It’s behind the dumbing down of DC investment strategies and it’s most definitely in the AE debate among the compulsionalists.

The compulsionalists are up in arms at me for promoting the idea of smartphone opt-outs. I’m not promoting smartphone opt-outs but because I blogged they were happening and because the Telegraph re-blogged and because of twitter, I’m now Mr iPhone opt-out and accursed enemy of the pension fascists who believe anyone daring not to want to pay into an auto-enrolled scheme should be sent to the headmaster and assume the position.

But this is not about opt-outs or about me getting persecuted , it’s about the special needs of the pension fascists and whether we can find them a cure.

I have made a suggestion to my friend, I’ve asked her to consider a really rich person who has £1.5m of pension and doesn’t want to trigger loads of penal taxation and applies for some tax protection which he or she gets on condition  no more money goes into pensions.

Guess what, along comes auto-enrolment and there’s nothing that can be done, said rich boy/girl is enrolled and has but a short window to opt-out.

Should rich kid take advice? The hell no! Rich kid should hit the smartphone and opt-out without any adviser getting in the way. Which is precisely what the Cs and Ds are doing.

Now if my friend thinks about it, she is not going to want Rich Kid to take advice because she knows it’s a no-brainer that rich kid gets out and doesn’t lose protection. We all understand tax because we pay it.

But what about Mr C or Mrs D, they have no spare cash, enjoy a few state benefits and are looking at a retirement where the less they have, the more they get from the state. Tax is really not in the equation. Is it not as sensible for them to hit the smartphone and say “get me out of here”. The hell it is.

I am providing therapy to my friend, I can show her that she is not the fascist she appears to be but just a misguided parentalist. Then , very slowly I can wean her off her “compulsion dependency” and re-create a balanced view that recognises that people should be allowed to make their own mistakes. I might even get her to see that some of the people opting out may be right!

The opt-out of compulsory pensions is the best bit! If we didn’t have it we’d be like Russia or China or Chile or Australia or some such junta.

Giving people the option to opt-out of what seems to the rest of us, a no-brainer of a decision, is what makes for the rich tapestry of British life.

As the Pension Plowman, surveying the field of folk from my Malvern Hill, I am dispassionate and relaxed.

My friend, you may be a pension fascist but there is hope. Read this and feel my libertarian love!

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in Australia, auto-enrolment, corporate governance, dc pensions, doctors, happiness, iphone, pension playpen, pensions and tagged , , , , , , , . Bookmark the permalink.

6 Responses to We should be proud to have an opt-out!

  1. As always, very thought provoking Henry, but the problem is that letting people make their own mistakes isn’t cost neutral for everyone else. They then have to be supported by those who have provided for themselves and the cost of doing this is what’s driving the Government to try to nudge people into pension saving in the first place.

    You’re absolutely right that Mr C and Mrs D should opt out given the current situation. It’s only by giving notice of the definite intent to remove means-tested benefits for the elderly that we can show them it is worthwhile for them to remain in. Once that is the case, compulsion becomes the best way forward, in the same way that motor insurance is compulsory. No one thinks they’ll have an accident but it’s better for society to force them to insure against it anyway. In the same way, no one truly believes they’ll grow old but compulsory pension saving forces them to insure against what seems a complete impossibility when you’re 25.

    • henry tapper says:

      There ae some quite interesting stats on the number of non-insured drivers out there – as Bob Dylan so rightly put it “if you ain’t got nothing , you ain’t got nothing to lose – you’re invisible now- you’ve got no secrets to conceal.

  2. onwabia says:

    People keep thinking ‘a rainy day’ won’t happen to them. I think we all need to accept that at some point we are going to need help. Every country is beginning to struggle to look after it’s population. The UK has a high tax rate compared to many other countries and people work tirelessly for years on end and then have very little to show for it. My parents are a sadly a prime example of people who were benefiting from the boom a few years ago, with their own successful business of over 20 years. Several loans and stages of re-investment later, my father needs pension credits. Our family used to spend £250 on an average weekly shop. We now spends less than 20% of that per week on food. Where did all that money go? I, their first child, a graduate has to go on benefits as they can’t provide for me in the present. These are people who brought me up to think going on the dole was a failure of some sort. This current situation was never planned.

    Weaning is definitely necessary. Irresponsibility seems to be a bit of a drug when it comes to some of my parent’s generation. Choice and change are part and parcel of a free society, but choice without being informed is like a baby looking at a knife and thinking ‘shiny’. Great post

    • henry tapper says:

      It would be great if you could write this post into a 400-500 word article. It certainly woke me up this morning.

      “Intergenerational transfer” sounds a foolish intellectual phrase to describe what’s going on in your household.

      If you do want to do a guest blog, contact me on henry.h.tapper@gmail.com and I’d be proud to host it

  3. Pingback: Whose risk is it anyway? | The Vision of the Pension Plowman

  4. Pingback: How was the Plowman’s vision? – 2012 #pensions predictions revisited | The Vision of the Pension Plowman

Leave a Reply to Tom Murray (@TomMurrayDublin) Cancel reply