Labour cops out on pensions crisis
In what is probably its last chance to create positive momentum before the election, the Government has once again ducked the fundamental issues behind the pensions crisis in favour of the usual short-term political fudge.
Delaying personal accounts gives out precisely the wrong signal about the importance of pensions in our society and the other minor changes continue the long history of tinkering with the pensions system purely to extract more money from those who are contributing.
The pensions crisis, which is evident in the rocketing cost of annuities and the collapse of final salary pensions, is a pressing financial issue for everyone.
But the solutions aren’t just financial, they are about enabling people to come to terms with the shifting sands of retirement and pensions and sort things out for themselves.
Instead of that, governments have consistently put barriers in the way with layer upon layer of complexity, contradictory state benefits and a failure to deliver on promised tax reliefs.
Just last week we commissioned a survey which revealed that 44 per cent of the population think that none of the political parties will be effective in dealing with the UK’s pensions issues.
And through the PBR, the Government has confirmed our worst fears that no leadership will come from that direction; it’s going to be up to us as individuals.
We all need to update our thinking about what work means to us, whether it needs to end at an arbitrary retirement date, how we want to live a longer life, or how we optimise our existing financial arrangements, including all the bits and pieces of pensions that we all have, for the future.
The role of professionally qualified advisers and the whole financial services industry in helping people through the pensions mire is more crucial than ever before.
Personal accounts have their detractors for very good reasons – but at least their early introduction would have been a clear message that pension provision is a key part of our lives.
Instead, we have been given even more confirmation the political football has been taken home. Politicians have again copped out of the pensions issue.
And with the Government decreasing its funding for public sector pensions and in effect starting to roll back its own defined benefit scheme, it is now more than ever down to individuals, working with their advisers, to sort things out for themselves.
Brian Wood is the author of Beat the Pensions Crisis.