Let these politicians do some work!

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We have had so many referendums and elections and leadership battles and cabinet reshuffles over the past two years, that politicians may have forgotten they are here to govern the country. We elect 650 people every five years to do a job of work, not to showboat from one media circus to another.

The party conferences this year seem particularly pointless. We are not due an election for four years , we are in the middle of an arcane dispute with Europe about how we extricate ourselves from the European Union and our economy continues to rack up debts as we continue with the current economic policy into a seventh year.

Ordinary people are worse off than they were in 2008, they are polarised between those who sit on fragile housing wealth and those who don’t, between those who have pension rights (the public sector worker) and those in the private sector (who have auto-enrolment).

The young are surly and live with the uncertain expectation of “wealth cascading through the generations”. As a nation we are unproductive, people are under-motivated, there is no big idea driving the nation forward.

If anyone has captured the public imagination, it is Jeremy Corbyn; he is admired for not changing his views since the 1970s. It could only be in a world bankrupt of any political spark that such a regressive outlook could inspire.

In such a vacuum of hope, even Vince Cable believes he has a chance to be Prime Minister.

We need politicians to do more work

The particular policy area in which most readers of this blog have an interest, is financial services and in particular the reform of our pension system.

This is an area in which much can be done to improve the lot of ordinary people. Unfunded pensions, especially the state second pension have been reshaped and probably need further reshaping to iron out some wrinkles (WASPI, the contracted in). But the big job has been done – probably Steve Webb’s biggest legacy.

Auto-enrolment is going well and though it faces big tests over the next three years, it has the support of the small businesses that we feared would not or could not participate.

The decline of our large DB schemes into the current mess is however a national disgrace and one that is directly attributable to a heavy-handed and unimaginative approach from Government. Not only has it resulted in a wholesale reduction in retirement prospects for a large proportion of the working population but it has seen productive capital diverted into non-productive investments – principally bonds.

I have table a request to speak at the Tory Party conference to excite the audience into considering the long-term renaissance that the better allocation of pension capital could bring. If we were to put the trillion pounds invested for our retirement in DB schemes to work, rather than to sleep, then pensions could become part of the solution – not the problem.

I very much doubt that I will be heard by the Tory grandees, but I will not be shy if I am! Pensions is an area where much can be done and it is not enough for us to sit and watch others, we need to show leadership to the politicians, otherwise they will do no work!

We need to work better – Productivity is all

As a nation we are unproductive, we sit around on our arses and moan too much. We moan at politicians for doing nothing and while we moan, matters get worse.

Successes – such as auto-enrolment – happen because politicians make rules that we can follow, this is proper Government. The reform of the funds industry being carried out by the FCA is proper Government and the work of CMA to prise open the hegemony of a few investment consultants will be the product of proper Government.

When I spend time with our pension management teams, I sense a zeal to do the right thing, whether to get scheme funding right, keep records accurately or talk to staff about their benefits and options. There is real pleasure in that productivity, our offices are happy places, the happier for being busy.

Productive work is what gives quotidian meaning to most ordinary people (me included). Without it, things would fall apart, the centre could not hold.

This is what we can teach those in Westminster, we want to be kept busy, we want to be industrious and produce! The current jaw-jaw about what we might or might not do is a distraction from what we should be doing – which is driving our nation forward as a single productive entity.

Pension policy is a part of that, but only one cog, I will be going to Manchester next week with some fire in my belly, determined to kick ass. Time to get pedalling again!

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About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions, Politics, Popcorn Pensions, Public sector pensions, Retirement and tagged , , , , , , . Bookmark the permalink.

4 Responses to Let these politicians do some work!

  1. John Mather says:

    What % of contributions or the average fund or average pension in payment does the £3000pa of administration costs amount to for the average DB member. as mentioned in last week’s blog.

    How does this compare with the commission and charges on your Allied Dunbar (SJP) plan

  2. henry tapper says:

    If you use Alan’s number (£150pa) and consider that the average DB pension is £4500pa, the operating expenses amount to 3%. The commission on my Allied Dunbar pension is about 3.5% pa. This is not a like for like comparison, the Allied Dunbar commission payments are purely the cost of sales.

    The commission is paid on top of the costs of operating my Allied Dunbar pension which amount to around 1% of the fund a year. What I am interested in knowing is the total operating cost of running an income drawdown, as a percentage of the amount drawn down, or the operational cost of running an annuity for £4500 pa.

    • DaveC says:

      Iirc my dad was paying ~ 1% amc on a £300,000 pot, and ~ £300 pcm in contribs.

      In recent years his pcm payment just went direct to the company managing his mix of investments, who just invested in other funds anyway (with their own costs wrapped in total performance)

      All cheer for QE driven ‘wealth’ creation in bonds and equities. Yay!
      (If you’re a wealthy investor/pensioner)

  3. DaveC says:

    Why not just clear the national debt with a new debt created at zero interest and repaid over 1000 years?

    Who loses?

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