Taking on Arun’s challenge
Let’s not mince about here, Arun is looking to big-up his SELFIE so I thought I’d take up the challenge as a fan of Pensions. For SELFIE info – click here.
Unsurprisingly the score was -2 to PSH and +10 to SeLFIES
If we go on to answer all of Arun’s supplementary questions as framed , we get an overall score of -1 v 15 in favor of Selfies (assuming that longevity protection can be included in a Selfie).
I like Arun’s style but I don’t think all of my customers are currently in the market for his kind of #retirementincome.
SELFIES or Pensions
FOR SELFIES
Arun’s argument for SELFIES is that they are a simple and easy way for Government to take in money in return for a promise to pay that gives people a defined benefit by way of certain retirement income.
Government wants our money (partly because it is finding buyers for the glut of gilts being returned by pension schemes looking to buy-out).
People want income and they don’t know how to spend their pension pots . Many people have their money in savings rather than pensions and Arun’s SELFIES can be bought with savings as well as money in pension pots.
So they fulfill a need and Brazil shows that they can operate very well in the absence of a viable alternative. But…..
Against
The UK has one of the most developed private pension cultures in the world. We have a well developed fully functioning financial services industry adept at ringing blood out of a stone and creating gilts + income streams , providing through longevity pooling, insurance and reinsurance , income streams that last for life and we have worked out that long term investment from private savings can meet the needs of our economy rather better than Government borrowing.
In short, we should not be basis our private retirement system on Selfies. Arun does himself no favors insisting that pensions should not be taking market risks, he is better than that!
If the only way that SELFIES can be promoted is by dissing an existing system , then people will spurn SELFIES. We can’t all sit home on the range!
The farmer and the cowman can be friends
Arun is the farmer, tending his farm with assiduous care. He offers a reliable product that is as boring as porridge oats.
farmer
I am out on the prairies hustling cattle and opening up the wild west. My vision for pensions has no horizons , no enclosures.
cowman
The farmer and the cowman can be friends. SELFIES can sit alongside invested pensions, there is space for the both of us!
And if this is the blog that Arun wanted to solicit with his mischievous comparison , then here it is.
I have probably done him some favors by reminding us all that we need both farmers and cowpokes to have a successful pension system.
“Territory folks should stick together , territory folks should all be friends”
