The VFM podcast,which I follow, this week follows the ABI as they get a new logo,has a 40th birthday and has a conference to tell us what it can do to put Britain to rights.
“Engagement” before and after retirement is the key thing. Mortgages is for the ABI is a success because it is real to people but pensions isn’t, because of DB pensions. Well that’s what Yvonne Braun and Michele Golunska have to tell us. DB pensions have stopped us loving pensions because they don’t engage people with their pension in the way that DC pensions do.
And what is our great failing? Of course it’s the failure of Britain to engage with the 12% mandatory contribution rate achieved in Australia. A comparison between a non-mandatory 8% (of band earnings) relative to a compulsory of 12% of all earnings may make Australia look more adequate. But the comparison makes no mention of national insurance or our non means-tested state pension
We are starving the insurers by allowing some DB schemes to soldier on and not hand over their money to the insurers and we are starving the insurers by not forcing people to annuitize retirement savings into insurance policies. We are starving the ABI’s membership by paying increasingly proper pensions to everyone via the state pensions and pension credit is increasingly being picked up by those who qualify for it.
Frankly, we are not doing what we should do by not handing over pensions to insurers – or so you would think if you listen to this pod.
We have a national insurance system not a system that relies on private insurance. This is the case for pensions and it’s the case for healthcare. We can also pay for private insurance but it is voluntary. Perhaps the ABI will get its way and we may become Australia but we’ll have to have a much more radical right wing Government than we have yet to see.
