Annuities: Has another election winning time-bomb been lit that will devastate the futures of normal people just so a Political Party can get back into power?


Read the latest opinion polls and it is easy to conclude that George Osborne’s 2014 Budget has had the result that he was looking for.

With both next year’s General Election and perhaps more importantly, this year’s European Elections firmly affixed in his mind, it was certain that polices would materialise which were likely to incentivise voters in the short term and once again take attention away from what will happen as a result in the long.

However, the steps to remove an obligation to invest at least some of a pension pay-outs on annuities may take this quick fix and opiate-like vote winner into an entirely different league when it comes to rolling over the problems facing the current Government in to the difficulties which will almost certainly be faced by normal and everyday people in the future.

Pensions are a hateful topic for most people simply because the funds within them are untouchable. To struggling wage earners, reading an annual statement from their provider and seeing how funds can be growing at a healthy rate, can certainly be a torment. It often gives that siren-esque gremlin on their shoulder the perfect opportunity to preach a tale of how much better that sum of money would serve them if it were in their own hands right now.

As many already know, the realities of long-term money management requires a lifetime without financial challenges at best, not to mention the most exquisite forms of discipline at a very personal level . This is why pensions – and until this week annuities, have been safely kept out of reach. Temptation and therefore all the basic requirements and influences that come with living a life today are or have been safely kept at bay, without any of those threats being responsible for the potential hells that may without them come from many of our own tomorrows.

Removing the obligation upon retirees to ‘buy’ an annuity will naturally – and very understandably – be perceived as a massive gain for many. The caricatures of OAPS in Ferraris may in practice turn out to be anything but unreal once the Policy comes into effect.

But when people have experienced a lifetime of financial prudence and responsibility, exchanging this and the future they have banked on for what is arguably little more than a lottery win situation could turn out to be very costly indeed.

Windfalls are by their very nature difficult for almost everyone to deal with in a reasoned way because they are naturally habit-breaking in the extreme. Having large ‘disposable’ sums of cash suddenly available can seriously skew a person’s view of the world on what might actually be a very temporary basis indeed and a study of the effects of sizable cash wins on real-world people may have served the people behind this plan very well.

This really doesn’t seem like a policy which has the best interests of the retirees in mind and especially so when you consider the state of the Country’s finances and the most recent comments suggesting that the State Retirement Age with have moved to 70 by the year 2040. Hardly comforting news if you have no annuity to top up an insufficient State Pension and therefore are left with the glaring possibility that you will have to continue working until you literally drop.

With life expectancy rates going up all the time, what sort of desperate circumstances are people reaching pensionable age from next year now going to have to face, long after the Coalition Government knows the result of the 2015 General Election or Mr Osborne’s tenure in No. 11 Downing Street has well and truly ended?

Annuities may indeed have become yet another product or service which serves the interests of those making profit before it ever will the customer. This however, doesn’t mean that an approach to savings and income of this kind still doesn’t have its place. In fact, you might argue that similar products have a much bigger role to play with the State’s ability to support even our existing OAP’s dwindling almost by the hour.

Hardly a prudent or considered form of policy making on behalf of those who are falling over themselves to look after their own elect-ability today at the expense of everyone else’s tomorrows, is it?

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Will decriminalising non-payment of the TV License Fee simply pass more power to unelected profiteers?

Passing the buck is actually the phrase that comes to mind when I read about Parliamentary plans to decriminalise non-payment of the TV License fee and devolve the administration of non-payment to become a civil matter. But beyond the risk to the BBC – which may indeed be a far more politically motivated result than maybe immediately apparent – there is a far more sinister reality that parks itself firmly behind this move, even if it may never have actually been intended.

This pathway does after all open up a whole new set of commercial possibilities for companies that profit from the misery of debt, with the added bonus that very few households exist in the UK without having at least one TV.

The smell of profit in such circumstances will surely motivate a whole new approach to the way that License Fees are obtained. With the help of what are likely to be almost guaranteed Government backed options that have simply never been available to the commercial stations or even the entertainment powerhouses such as BSkyB, this move could really prove to be a payday bonanza if you are in the debt collection business and out looking for a ‘bombproof’ contract.

We today find ourselves living in a culture where the true power lies in money; what we do or don’t have, but most importantly, the information and therefore credit rating that companies – YES commercial companies – often hold about us.

I’m not signed up to the idea that there’s some kind of rich vs poor conspiracy at work in this Country, but would be stretching the truth if I weren’t to then say that there is something fundamentally wrong with the way that enslavement through debt seems to be a much better and successful form of social control than religion or draconian laws ever appear to have been throughout history.

Government – for all that it is worth, appears to be sleepwalking into awarding yet more and more power to the people who make great livings out of the profit that comes from keeping people as slaves to debt, whilst they surrender more and more of the responsibilities they have to us, to private companies and individuals as they do so.

Simply because of idealist, often politically motivated and self serving priorities on the part of those who we have perhaps mistakenly thought we elected to govern responsibly, our lives are becoming ever more controlled on the basis of the profit margin that we represent to somebody, rather than having our freedoms and basic quality of life preserved and protected as we should all quite rightly have been able to expect.

Changing the rules in this way just to keep desperate people out of one prison is just going to put many more into another. It’s a form of servitude from which none are likely to escape whilst Politicians continue to value the quality of life of others they don’t know and understand so very cheaply.

picture thanks to