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Political problem with pensions

To read the recent national newspaper headlines, one might believe that some action was about to be taken on pension reform.

Everyone bought into what the Prime Minister and his pension reviewer Adair Turner had to say. The public were told they would have to save more or taxes might have to go up, they might have to work longer or be compelled to save.

The Prime Minister is thought to be planning a move away from means&#39 testing. Secretary of State for Work and Pensions Alan Johnson indicated in the House of Commons that means&#39 testing was a temporary phenomenon designed to alleviate pensioner poverty not the basis for encouraging future pension saving. Of course, there have been no concrete policies.

Money Marketing has very little against the Turner review. It underestimated the importance of financial advice and blamed advisers for being expensive when the real problem lies with the Government for trying to bring in its wrong-headed stakeholder reform on the cheap. But the overall analysis was accurate,if a little obvious.

The problem lies with politics and in no small part in the way the Government operates. Savings policies have failed but this will never be admitted. Take stakeholder, rejigged despite being a failure.

More worryingly, the Prime Minister and the Chancellor may now be extending their disagreements to pensions. The betting must be on even more paralysis.

And, of course, nothing will be said that could provide the Opposition with a means of attacking the Government before the next election. Meanwhile savings continue to slide. What is needed is bravery, leadership and direction from ministers.We will let you know if we ever see any.


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