Government must act on longevity
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The Beatles once asked: “Will you still love me…when I’m 64?” Following the announcement by Harriet Harman that compulsory retirement would end, this song may well be directed at employers instead.
Harriet has shown so many times that she does not do joined-up thinking and is no more than a soundbite politician bereft of any strategic skills. The thought of her being the UK’s commander in chief at some time in the future would be enough to lead to mass exit from our armed forces.
This Government has been guilty of changing legislation without thought to an impact it may have elsewhere. What can I cite as evidence?
Pension simplification springs to mind - great idea totally derailed by vested interests. Then this was totally wrecked by the Treasury who used spite instead of a strategic solution to try to trap the big-earners in the banks. Resentment is corrosive.Whenever you feel it, you should regroup as it destroys you quicker than its source ever could.
Yet it is this very emotion that seems to drive this Government if they are not taking a pop at Eton or the so-called fat cats who often supply the tax revenue that allows this lot their ridiculous indulgences.
On the plus side, I attended a meeting with Department for Work and Pensions’ officials around six months ago about communicating the changes to state pension. I harped on about the need to communicate in a way that the end audience could relate to.
When I attended the drop-in presentation the other week I was blown away by how they had done what I had called for at our previous meeting. I am not for one minute suggesting it was my idea - this is not like the ad for Windows 7! Their communications package is well segmented and will hit the spot.
If the DWP can get it, why can’t Harriet and her chums? It can’t be too complicated as they managed to fully understand their expenses scheme, leveraging it to the extreme, including complex capital gains tax planning.
Instead of working longer, let us look at making people make smarter financial planning and investment decisions. We need to make being financially smart as important as being physically fit. Transactional sales rarely educate any consumer, so the evolution of advice through the introduction of adviser charging will hopefully engage the consumer to the point that they can see the benefit of looking further than next payday.
To do this, we need to let people view the reality of doing nothing and how that will restrict their choices in later life, specifically the choice to stop working at a reasonable age.
Just as public sector pensions have created two tiers, we can look forward to segmentation of those who can still work and those who cannot.
I recall the first time I went to Florida where the bellhops were all over 70. I cannot imagine that we should accept as a solution working till we drop - it is not an acceptable solution. Longevity is the biggest issue that the Western World faces and yet the politicians do not act.
Perhaps the song we need to hear soon from Harriet and her chums is that one from Pete and Dud - Goodbye, goodbye we wish a fond goodbye.
Robert Reid is managing director of Syndaxi Chartered Financial Planners
Readers' comments (4)
John Blackmore | 28 Jan 2010 2:33 pm
It is only within the last 100 years or so that a distinction has been drawn between work and non work.
I can imagine that we should accept as a solution working till we drop. In fact we should all be encouraged to do work that we enjoy for as long as possible.
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Julian Stevens | 28 Jan 2010 5:10 pm
All of which is a very long and windy way of saying that there's a desperate need for the annuity trap to be abolished and for unspent funds in retirement to pass down to the next generation without a tax charge. But this pigheaded government refuses to listen. Hopefully, Cameron's lot (assuming they get in) will be better.
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David Trenner - Intelligent Pensions | 29 Jan 2010 7:45 am
Its difficult to see how the headline writer got what he did from Robert's article!
However there is no question that, even if Robert didn't say it, government must act on longevity. And the unfortunate truth is that people will have to work for longer.
We have all seen the stats about how long people will live, and how many people in work there will be to support those who have retired.
The simple fact is that if people are going to live twice as long in retirement it will cost twice as much to give them pensions. The only option is to raise the retirement age to at least 75, but which politician will have the guts to suggest it?
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John Blackmore | 30 Jan 2010 10:38 am
@ David Trenner. If you are referring to me as the headline writer I got what I got from Robert's article by cutting and pasting from the penultimate paragraph.
"I cannot imagine that we should accept as a solution working till we drop"
and then wrote that " I can imagine..."
I will be only too happy to continue working until the day that I drop and feel sorry for those who are forced to retire or who only seem to get satisfaction in looking forward to their next holiday and the day that they retire - wasted lives in my view.
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