I am not sure what is the more breathtaking – the substance of what Chancellor George Osborne has done to pensions or the manner in which he has done it.
He has revolutionised the world of pensions, sweeping aside a 90-year consensus that pension saving has to be about providing an income.
It was a bravura piece of politics that has put clear water between the Tories and Labour. Any politician wanting to oppose the policy is going to have to argue that the nanny state knows better than the individual when it comes to their money.
The policy scores on a number of key points. At a stroke it wipes away all the negative headlines surrounding annuities, it generates money for the Treasury, it will pump money into the economy and it will make individuals think about their retirement. And what is the argument for pensions liberation now?
It will also pour more fuel on the housing market as retirees use their cash to secure income through buy-to-let, which will be good for some but not for others.
But for all the positives, it is disingenuous to argue people will not erode their pension savings years before they die. Behavioural finance experts have spent the last decade telling us human beings are hard-wired to spend today and take tomorrow as it comes.
The policy costings paper published alongside the Budget is silent on what will happen to the cost to the state of the extra Pension Credit likely to be payable to those who drain their funds. The single-tier pension does not abolish means-testing. This policy will increase it.
For some retirees, spending everything straight away and then going on state benefits will make financial sense. This moral hazard already exists for those with funds up to £18,000.
The debate is currently framed around profligacy versus self-control. But many retirees will end up withdrawing all they have to pay off debts.
Prudential’s Class of 2014 study found 17 per cent of those planning to retire this year have debts averaging £24,800. The interest they are paying on these debts is almost always going to be more than the post-tax return they could have expected in drawdown. In purely mathematical terms, clearing debt makes financial sense, even if it does mean these individuals will have less or no personal pension for the rest of their retirement. But an easy pot with which to clear credit card debts can also lead to people spending beyond their means.
Then there are the people who will draw their pension before they even retire. The pensions liberation saga shows us the lengths people will do to get their hands on cash today, even if they know it means considerably less cash in the future.
The Treasury predicts around 30 per cent of people in defined contribution schemes will draw down their pension at a faster rate than via an annuity.
There is no doubt that this policy is a short-term vote-winner. It will revive interest in long-term saving, but there will be casualties.
If the intention was to explain to people they are responsible for their retirement, Osborne could not have picked a better way of doing it.
John Greenwood is editor of Corporate Adviser