As published in The Mail on Sunday:
BY GEORGE! HE’S LISTENED TO US AT LAST
IN MORE than 25 years of reporting on Budgets I cannot remember one quite as revolutionary as Wednesday’s. Revolutionary, that is, for savers, those prudent individuals who turn to our pages every week for essential advice on building a nest egg for the future.
And far more revolutionary than previous savings-friendly Budgets, such as John Major’s in 1990 – when Tessas were launched – and Nigel Lawson’s 1986 Budget, which brought about Peps.
George Osborne’s offering was also great news for The Mail on Sunday’s Personal Finance team because it vindicated our tireless campaigning over the past couple of years on key savings issues. Our Hands Off Our Pensions’ campaign in late 2012 focused on giving greater freedom to those looking to take control of their pensions in retirement, while the Save Our Savers’ campaign fought to make tax-friendly Isas more flexible.
In addressing both key issues last week, Osborne has belatedly become the saver’s friend.
So a big thank you to him and his advisers for finally listening to us – as well as to David Davis, MP for Haltemprice and Howden, who in particular supported our Hands Off Our Pensions’ campaign long before any other politician stood up and supported the nation’s downtrodden savers.
And, of course, a big thank you to the tens of thousands of readers who backed both campaigns.
The liberalisation of rules governing access to defined contribution pensions will not truly begin until April next year. But already concerns are being voiced as to whether some individuals will use the new regime to plunder their funds as soon as they can (egged on maybe by family or friends’) rather than access them when needs dictate. There are also fears that rogue advisers will emerge, encouraging people to tap into their pensions to invest in inappropriate or expensive financial products.
They will, but if the regulator is as proactive as it claims to be, it should be able to stamp them out quite quickly.
It is right that such concerns are being raised, but they should not be allowed to detract from what Osborne has done.
In allowing people to take control of the pensions they have assembled throughout their working lives, he has freed them from the shackles of greedy insurance companies and their poor-value annuities.
He has entrusted them to be as prudent with their pension proceeds as they were prudent in building their funds. This is absolutely the right approach – far better than the nanny state attitude of some in the Labour Party.
Surely, a bigger concern than reckless pensioners and rogue advisers is a future Government unravelling the changes Osborne has put in place.
What we now need is for Osborne’s pensions revolution to be brought to fruition – and then an end to political meddling in our pensions.
If those two things happen, confidence in pensions will be restored and people will start saving again.
That can only be good news for the economy and good news for Britain.