The problem just will not go away. This generation is going to live longer than the last. The Government says it wants to rebalance the burden of providing incomes to people who have retired. It wants less reliance on the state or, more properly, the taxpayer, and more on the individual.
It is hard to put facts and figures on what is really happening. We know that a brand new defined-benefit scheme is about as rare as a week without a new Government initiative. We know that existing defined-benefit schemes are being closed to new members. Does this matter?
Of course it doesn't matter. The only people who really score in defined-benefit schemes are pre-1989 members who stay for ever and get a stonking pay rise close to retirement. Hardly anyone retires on 40/60ths or anything like it.
The so-called guarantee is no such thing. The employer can wind up the scheme any time he likes or go bust and leave a funding gap or sell the business to someone else – the Transfer of Undertakings (Protection of Employment) regulations do not cover pensions.
Defined contribution, be it under occupational or personal or stakeholder rules, is the only available route for today's generation. But they are showing a marked reluctance to save. Alistair Darling says there are 700,000 new stakeholder pensions but it will be interesting to see the figures for in-force regular-contribution personal pensions – including group personal pensions – plus stakeholder pensions over the last five years. I will lay long odds that stakeholder has not even delivered a blip.
People will not save for their old age unless they think it will be worth their while. I do not understand how the basic state pension, second state pension, minimum income guarantee and pension credit will interact with an occupational or personal pension. I bet I am not the only one, either. If I had time, I would ask Steve Bee to draw me a picture.
For very large numbers of people with very little money, paying marginal rates of tax around 30 per cent, it is almost certainly not worth their while. They have the groceries to buy.
Then there are those who choose to consume today rather than save for tomorrow and continue to believe that the state will provide – a belief which is reinforced by everything New Labour says. Whatever ill befalls you, Tony Blair cares deeply about it and wants you to know he is going to sort it out. Nobody is buying the rhetoric about individual responsibility, partly because it does not sit well with means tests.
Further up the income scale, there is plenty of asset accumulation going on, much of it outside the pension orbit. The tax relief going in is nice but not so nice if you think that the Government is likely to attack the tax-free cash concession coming out.
Chancellor Gordon Brown is looking for tax hikes and this one is obvious. Precious few Labour voters have big funds that will have to go into annuities at 75, so it seems safe to rule out this much promoted tax concession.
We were in a spot of bother in 1997. We have had pension minister after pension minister, initiative after initiative, millions of words and three years of flat stockmarkets. Surprise, surprise, we are still in a spot of bother.
And will remain so until the political parties get together and agree that they cannot expect people to take responsibility against a background of unstable pension policy. Don't hold your breath.
Graeme Laws is the former deputy managing director at National Mutual