The Treasury’s perceived slight on pensions has left one former minister fuming
The last 12 months might have been the definitive year of celebrity deaths, but 2017 has already seen the passing of John Berger, the art critic whose book Ways of Seeing helped many to interpret the meanings and messages buried in works of art.
While the Treasury’s recently released infographic Ways to Save in 2017 (subtitle: Learn about ISAs and other savings options) might not be in the same cultural league as treasures by Vermeer or Michelangelo, it would also seem to contain a not-too-well disguised missive.
It guides the reader on a journey from birth (Junior ISA), through first house purchase (Help to Buy ISA and Lifetime ISA) and saving for your growing family (Premium Bonds – that would be the ‘other savings option’, then). For those in their mid-to-later years, there’s ‘something a little more general’ (Cash ISA), saving for later life (Stocks and Shares ISA) – oh, and a mention at the end that the Lifetime ISA ‘can also be used to save for retirement’.
The Treasury is clearly keen to further the cause of the ISA in all its various forms, however ‘premium bonds’ is not the Other-Savings-Option-Beginning-With-P that most would have expected to see on a diagram of this sort. Surely a mention for pensions, with their matching employer contribution and favourable tax regime?
Baroness Altmann was incensed: “Pensions are in mortal danger – beware”, she warned in a blog post. The diagram, she says, “suggests that our private pension system is under existential threat.”
While that might seem alarmist, Altmann notes that the ISA-fication of long-term savings, is symptomatic of a longer-standing and deeper political malaise: “The Treasury sees them [pensions] as a cost to the Exchequer. DWP sees them as a benefit for people to give them a better later life standard of living.”
That sounds remarkably like the battle between short-term gain (tax for the Exchequer), versus long-term planning (pensions and the DWP) that the pensions industry struggles to overcome when encouraging individuals to think about their own futures. If government is not capable of a joined-up approach and persists in delivering conflicting messages, what hope is there for the ordinary citizen?
The antipathy between government departments has to stop, as does the undermining of the efforts to encourage greater pension savings through auto-enrolment and associated initiatives that the Treasury’s infographic implies. The public need the whole picture, not the viewpoint of a single government department.