Caught up in complexity
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I asked one what was the difference between Labour and the Conservatives. Simple, this old worthy said, when things happen that are bad for the image, with Labour it is money, the Tories it is sex. His theory was that each lacked sufficient supply of what brought them to their ultimate downfall.
Money has certainly done for New Labour as their love affair with the banking sector has left us all with a bill for the rebuilding of stability. While on the topic, just where has all this money gone? Is climate change causing money leakage too? But I digress.
This latest Budget has desimplified pensions. Is it not incredible that A-Day was a mere three years ago, yet it is all gone, at least for the next two years. Let us hope that the consultation goes the way of previous pension changes. I would advise you to not become too much of an expert yet.
Having said that, if you are not talking salary sacrifice to clients or their employers, you had better get a move on or they will be looking elsewhere for guidance.
Although the Budget is damaging to some plans, it is still great for planning and is the opportunity to prove the value of advice again. In my Budget article last week, I mentioned that arithmetic will be a necessary skill of the professional planner and I stand by that comment. But the real vital skill will be identifying the opportunities that this set of changes put in train.
All this additional comp-lexity comes at a time when the FSA has money guidance running. No chance of joined-up thinking here, as on one hand they promote help on finance to make it easy, then they make the delivery of advice harder.
Sometimes I think these financial architects in the Treasury are as much use as a chocolate teapot. Even they must see the impact that this has on their aims to make everyone more financially literate or was all of that just a phase? I think we should be told.
The level of non-taxable benefits that an MP receives makes the new pension cap even more ironic, especially when the impact on DB schemes seems less than equal. Could this mean that impact on senior civil servants is less than the rest of population? Surely not. This unequal approach must breach human rights legislation. After all, most other things do.
Let's all take part in the debate and ensure that we focus on the unfairness of the changes and the loss of some of the post-A-Day simplicity that they promised.
Communication is something that needs to improve for all advisers but the communications from the Budget were far from clear. It is ironic when you consider that so much is spent on spin.
If you are yet to see In the Loop directed by Armando Iannucci, I suggest that you see it soon. Peter Capaldi is toe-curlingly good as the control freak communications chief. I have to warn that if bad language offends you, then do not go, otherwise you will laugh until you reflect that if this is even 10 per cent correct, it is not the way any of us would hope that the country is run, simplified pensions or otherwise.
I asked that question about Labour and Tory differences to another MP, one John Major. He said that the Treasury would propose ideas, such as the £20,000 limit, and for every five that they proposed, the Conservative Government would reject three or four. Labour would accept them all without question Does that not say it all?
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