Houses are for living in – pensions are for life! An answer to financial economics.

“the river of private pensions in the UK will only get shallower as it widens out to include so many more of us”  – Steve Bee

Steve’s metaphor is so precise, so visual and so elegantly conveyed that this quote deserves a little place in pension history. As Alexander Pope said “what once was thought but ne’er so well expressed”.

Why Financial Economics doesn’t work in the welfare state.

There is something nostalgic about Steve’s writing, perhaps because he feels he is at the end of his career, perhaps because he sees the dreams of his youth unrealised, perhaps because he is frustrated that he has passed on the reins of influence.

But his experience and the consistency of his writing and his drawing over several decades means that Steve has the right to be wistful.

What Britain and most European countries embarked upon immediately after the war was the provision of a welfare state that would alleviate poverty for all. Other countries, especially America, went another way.

Watch this brief clip to see how far the gap between us has become

It’s staggering that one of America’s senior news channels can broadcast fake news about the Norwegian welfare system and delightful that the Norwegians have found such a clever way to laugh out loud.

Financial economics tells us our price but not our value

I have been derided for living in my “wonderful world” of social inclusion and proper pensions, particularly by a group of American economists.

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Which prompted Alan Chaplin to post this

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I am ignorant of financial economics, but if it knows the price of everything and the value of nothing – I intend to remain ignorant.

I am also ignorant of the market price of my house, though rumours are that it is some 30% lower than at the Central London market peak in 2015. My ignorance is another thing that puts me at odds with most Americans (apparently).

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The value of my house is – to me- what it was in 2012 , 2015 and today. It’s value to me is its location, its high ceilings and its proximity to the Cockpit. This is its utility.

the cockpit

I do not measure my net worth and debt capacity by the price of my house, otherwise my self-estimation would have slumped in the past three years!

Similarly, I do not use the cost of buying out my pension with Zurich Financial Services to castigate myself for not being a millionaire! I could have taken a million or more as a transfer value but chose instead to be paid a wage for life – a life I intend to extend by drinking less and exercising more!

It makes no difference to me if I have negative equity or lots of equity in my house, it is still my house and I love it’s utility and high ceilings!

It makes no difference to me if the transfer value of my pension could be £500k, £1m or £1.5m – I’m getting a pension paid to me for the rest of my life.

I am immune from Financial Economics and Financial Economists can buzz off!

Price is not important if you are not selling; FE – buzz off!fly.jpg

I do not want my life to be a prey to financial economics. I share with the Bazooka a belief that we can keep  collective schemes open (though it may mean reducing guarantees to shake off the financial economists).

If anyone wants me to rehearse the arguments we make about the “Normal cost of pensions”, about “how we keep collective pension schemes open” and about how Royal Mail and others are actually doing this, please follow the links!

William Blake got it right in the 18th century and we’ve been getting it right ever since

In his songs of experience, Blake included a poem called London, that originally referred to dirty streets and the dirty Thames. He changed “dirty” for “chartered”. For a full explanation of what chartered means in the context follow this link.

Here is the nub of it

Thomas Paine had stated in his best-selling Rights of Man the year before: “It is a perversion of terms to say, that a charter gives rights. It operates by a contrary effect, that of taking rights away.” Likewise, even Edmund Burke, generally a defender of the positive aspects of charters, had scrutinised the word critically in Chartered Rights (1784): “Magna Charta is a Charter to restrain power, and to destroy monopoly: the East India Charter is a Charter to establish monopoly, and to create power”.

I fear that we are selling out our welfare to the financial economists much as 18th century capitalists were buying out our green and pleasant land.

Here is Blake’s great poem against the restraint of land, rivers and by extension human happiness.

When I get to meet John Kiff, Andy Biggs, John Ralfe, Ed Bartholomew and co, I will recite it to them



I wandered through each chartered street,
Near where the chartered Thames does flow,
A mark in every face I meet,
Marks of weakness, marks of woe.
In every cry of every man,
In every infant’s cry of fear,
In every voice, in every ban,
The mind-forged manacles I hear:
How the chimney-sweeper’s cry
Every blackening church appals,
And the hapless soldier’s sigh
Runs in blood down palace-walls.
But most, through midnight streets I hear
How the youthful harlot’s curse
Blasts the new-born infant’s tear,
And blights with plagues the marriage-hearse

It’s a wonderful world

But – for all our differences – John Kiffington  and I found something to agree on yesterday! Louis brought us together!


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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