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Poor perception

The older you get, the more you reflect on life and events. Perhaps that is just the transition towards becoming the archetypal grumpy old man.

As the demise of alternatively secured pensions heads towards us, the expression “lost the plot” gains relevance. If we are to promote saving, we need stability.

This weekend, I listened to Money Box and heard a plea for Government funding for a partial matching saving scheme for the low-paid where, for every pound saved, the Government would add 50p. Interestingly, a pilot scheme had used a 1 for 1 ratio. Why was not clear but then neither was why the follow-on scheme was to differ.

The think-tank pushing for the expansion of this scheme hit out at the tax relief given to the better-off. With a bit more research, it might have focused on higherrate relief for pensions but it did not.

The Personal Finance Society will soon be getting ready for a wider roll-out of its pro bono scheme where the highly successful methodology is put to the test in a wider range of Citizens Advice Bureaux. Personally, I would like o see some Government support for what is the only initiative in this area to have delivered real results.

If people do not save, it is not because there is no incentive via matching or tax relief, it is because they cannot afford to save. I must admit to exasperation when listening to think-tanks full of people who would not know poverty if it came up and bit them.

Is that not the real issue? People in Government – and here I include senior civil servants – have no perception of life on an inadequate level of income. The major flaw is they think everyone is just like them and it is only a question of scale. Well, I have news for them – the fixed costs of living affect people at the lower income level far more than the rest of us.

The explosion of credit has been due in no small measure to the economic policies of this Government. Not only have we followed the US in its war efforts, we have copied much of its economy too.

I just wonder if the Bank of England’s monetary policy committee were to increase rates markedly, would it last or would Gordon Brown find some reason to disband it? After all, if spending starts to slow, Brown’s prudence will soon evaporate.

The more spiritual among us believe that what you push out determines what you receive. On that basis, Brown is in real trouble. The sheer volume of spite he distributes can only come back to haunt him.

As we all live longer, we need long-term plans and there’s the rub. Politicians want things that deliver in a short timeframe but pensions are a long-term problem and needs creative solutions, not soundbites.

Does it really matter if a few people benefit disproportionately? It is not as if the money they save will do anything other than simply find its way back into the UK economy.

I would be interested in what other financial advisers are finding but, in my practice, one in five of those retiring are leaving the UK for good and that cannot be good for the UK in the long term.

As age advances on me, my kids tell me I am more like their late grandpa. In so many ways, I could not wish for a greater compliment. We need to impart similarly positive statements to clients and colleagues. This is the time for looking forward, not back.

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