Strongly against. What you will have is people like Mandleson directing that people’s pensions get used to bail out failing industries.

Make it completely free as to where the funds go. They will end up where needed. If the UK economy isn’t big enough to support the pensions people are prepared to save for, then the funds need to go overseas to generate the income.

Pension Equalisation isn’t on either. It’s just taking money from those who have saved to those that haven’t.

Force everyone to save. Sounds un-libertarian, but its better being force to save for yourself, than being robbed to pay for someone who hasn’t.

If people are forced to save, its clear some will not have saved enough by the time they have retired. However, most people will have had good years, and some bad. That means that the good years, with compound interest, they are likely to have enough to cover the 5K guarantee. Remember that even post crash, a median worker retiring today would be on over 20K a year if their NI had gone into the FTSE. Over a 40 year period, its a low risk guarantee.

Where I do agree is over the principle of preventing governments getting their hands on pensions a la Brown’s tax raid. That’s pretty disasterous. If you take 20% of the income you reduce capital by 20%. I’m not sure the BoE approach is the correct one. Let me propose an alternative.

The pension system is set up and goes to a referenda. In the referenda is the clause that the system can only be changed by another referenda. The scheme is free of tax whilst accumulating. ie. Prevents politicians from raiding the schemes.
On any attempt to change the law, people have the option of withdrawing the fund in its entirity free of tax. ie. The government is tied in.

I don’t think I can emphasise enough the nature of stopping acruing more debts.

8 Trillion and rising when you only have an income of 0.5 trillion is madness, particularly when people need certain services such as health defense police…. That takes a huge wack out of the 0.5 trillion. Will people tolerate no services, but 50% taxation to pay for past debts? I doubt it.

Will the government allow people to take their tax and opt out of some services because private companies can provide the service cheaper? Take education. Give people their 5.5K per head spending back, and allow them to go private. Given they opt out means they should have to pay the long term pension costs of the state sector. The state can’t manage that. Neither can the public.

The sooner the break is made, the smaller the problem.

Nick

We’d also like to see ALL private and public pension contributions paid into a government-guaranteed vehicle controlled by the Bank of England. Neither government nor private companies could get their hands on the cash flow accruing from pensions thereafter.
In a tightly controlled environment the funds could then be used for UK investment in the way Nick envisages.

Here is the solution for all state pensions.

1. Stop accruing any more debts.

2. State employee pensions move to funded from now on.

3. For state pensions. The government offers a guarnatee. We will as a society top up anyone who doesn’t save enough to get 5K a year indexed linked income in retirement.

4. The condition for the guarantee, is that you have to save 10% of your income for your working life.

5. The top up is once off at retirement.

Now initially, lets say someone has 29/30 years for a full state pension. That 1/30th of a state pension currently would cost 5000 pounds to buy. Most would not get this from 10% of their income in the last year. So they would get a top up. However, given that over time the 10% benefits from compound interest, they will quite likely have accumulated enough to get at least 5K. They get no help.

Over the long term, average wages, NI going to a fund equates to 20K pa in retirement rather than 5K. People will be better off.

Money invested will also result in investment in UK industries. No FX risk being the main point. Good for the economy too

Nick