It is possible, with some imagination, to infer a thread of continuity which links George Osborne’s revolutionary announcement on Wednesday to the Labour Party’s manifesto for the 1959 General Election.
That manifesto proposed giving council tenants the right to buy their homes. Michael Heseltine enacted that promise.
The privatisations of the 1980’s and demutualisations of the 90’s invoked the spirit of a share-owning democracy and I-want-it-now consumerism.
In this century, Callum McCarthy’s Retail Distribution Review is attempting to make the advice process work for the consumer, rather than providers. Lord Turner’s “work longer, save more or accept lower income in retirement” requires everyone to take responsibility for their future in retirement.
The proposed pension reforms are in tune with other changes aimed at reversing the flow of causation in the industry, including the FCA’s drive to make markets work better for the consumer. They could help rebuild the psychological contract between people and their pension, ensuring that the word “pension” will be no longer a profanity.
Perhaps, in the light of the Chancellor’s declaration which reinforces ownership and responsibility, we can all be rentiers now. Or at least aspire to that status.
The implications for the retail investments industry will be very big.
This is a bigger bang than RDR, because it will affect nearly everyone: all ISA holders, and all auto-enrolled employees.
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