It’s not over till it’s over…
The Pensions Act 2008 received royal assent last week; so that’s that. Well, not completely, there is still much detail to be filled in later on with regulations and rules that are still to be decided on and written up. Think of the Pensions Act as a new-build house that’s still to be painted up and decorated and have fixtures and fittings put in if you like. We’ve got the basic structure in place and the next job is to tart the place up and make it liveable.
There’s a problem though that will probably render the future discussions and deliberations about the details more or less irrelevant I think. That problem is that the builders of the house carried on with the building project even though all around them were pointing out that the foundations had not been laid properly.
The underlying structural defects could lead to this house eventually being condemned. If that happens I doubt anyone will care what colour the carpets and curtains would have been. As I said, the detail may simply be irrelevant.
Reading the Financial Times last Friday made me think the first cracks are starting to appear in the walls. In an article written by Nicholas Timmins, the paper’s Public Policy Editor, it was reported that Chris Grayling, the Conservative’s Shadow Secretary of State for Work and Pensions, has some reservations about the idea of a national scheme of Personal Accounts.
Apparently an incoming Conservative government will scrap Personal Accounts if it is not clear they will be simple, low-cost products. The article points out that the Personal Accounts Delivery Authority (the PADA) has indicated the charges for the proposed new scheme are likely to be nearer 0.5% than the originally proposed level of 0.3%.
Saying much the same things as he said when we had our recent chat on Pensions Radio (Interview with Chris Grayling) Chris Grayling reiterated his view that Personal Accounts will only receive his party’s support if they genuinely do provide the ground-breaking low-cost pension provision that was promised. If that’s not to be the case (and no-one knows what the detail of the Personal Accounts product will be as yet) then, in his own words, “we would be asking hard questions about whether we need to reinvent the wheel”.
The report in the FT ends with Chris Grayling saying that one of the other potential “deal breakers” is means-testing.
Ooh –Err! That one’s going to take more than a bit of Polyfilla and a carefully placed pot plant to cover it up isn’t it?
You’ll know, I guess, how pleased I am to hear senior politicians saying that the message going out to people on pensions should be that it will pay to save. That’s not the case with the proposals contained in this Pensions Act.
Means testing is an issue regular BeeLiners will know I was going on and on about to the original building team a few years back when the foundations for this house were being dug out and filled with sand rather than concrete. If it doesn’t pay to save, why would anyone do it?
Anyway, it’s 2008 right now and this place isn’t meant to be fully habitable until 2012. In the meantime, keep an eye out for further cracks appearing around the windows and the doors.
I reckon there’ll be loads of emergency underpinning work going on before long…..
1 December 2008
Source: FT, 28 November 2008
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