A high point of this year’s Budget was the Chancellor’s new pension policy – handing consumers new power over their savings and breaking a system which forced people into unfair deals that they often did not want. This week sees the first steps towards implementing it, so it’s worth reflecting briefly on exactly why it proved so popular.
Even most pensions experts would admit that while the topic is important, it is not exactly exciting. We all need to prepare for retirement, but few of us view the logistics of doing so with bright eyes and a sense of anticipation.
The reason the policy chimed so well is that it connected with a fundamental conservative truth – one of those points where our philosophy is at one with human nature. Yesterday, George Osborne put it like so:
“We’re talking about trusting people here. It’s not my money, it’s your money, this is the money of people who have worked hard and saved hard.”
It really is that simple – and the reaction to the Budget is a clear demonstration that simply put, sensible conservative principles still chime with voters. It’s good to see this ideal put into practice on the pensions front, and even better to hear the Chancellor articulate it publicly.
Hopefully we will see the principle extended to other elements of savings policy. The state doesn’t just regulate savings vehicles, it also taxes the money and (all too regularly) devalues it through measures such as Quantitative Easing.
Here’s an idea for a way to develop Osborne’s theme – as well as giving savers the freedom to use their money as they wish, isn’t it time they were also given the certainty that their savings wouldn’t be eroded and undercut any further by QE?
Giving people control of their money is great, but they would also like it to keep as much of its value as possible. After all, “this is the money of people who have worked hard and saved hard”.
Ending what is in effect a stealth tax on savers would be another way to reward people who have done the right thing, and encourage others to do so, in the national interest.