More accurately, I come from Canada, which has its own pension problems but yet the quality of life in care homes over there is ranked highly in the world.
One digresses already. This week, amid the 560-pages in total of FCA and HM Treasury documents discussing changes to the pensions regime, the guidance guarantee and who will deliver - and pay for - it, a little-read Australian consultation was going on.
As part of an ongoing Murray Review into the pensions landscape Down Under, an interim report suggested that to solve what the Australians have called a growing pensions gap, some form of compulsion is needed.
Not compulsion in terms of saving for a pension, but some form of compulsory annuitisation.
Yes, that’s right. A powerful Australian lobby group of politicians, industry and distributors believe that compulsory annuitisation might be the way to go to solve the problem of people running out of money later on in life, just at a time when they most need it to cover their care needs.
The UK has already, famously, copied the Australian model to some degree in terms of compelling people to save into a workplace pension. We’ve not gone so far as to hold a candle under their hands, but we have introduced auto-enrolment, pinning our hopes on the fact that we are, as a nation, fundamentally disengaged with our finances and happy to let the status quo remain.
While complete compulsion was not brought in over here, we did hail the workplace pensions ethic of Australia, as well as the product construction of the Dutch, of course, as ways to help shore up our collective financial futures.
So when the news broke that the Murray Review might be considering bringing in compulsory annuitisation to cover later life issues, I actually laughed. It’s not often that 206-page reports make me LOL in the office. Usually that’s reserved for videos of cats failing at life or people in the office uttering inane statements such as “Don’t you find that glasses not only make everything clearer but brighter?” Yes, that really happened.
I laughed, because the previous week, when Financial Adviser held a morning masterclass, in association with Sanlam UK and Just Retirement, the changes to the UK’s pension landscape were hailed as a means to greater flexibility and product innovation.
The removal of the compulsion to buy an annuity, which gorgeous Gideon George Osborne announced on 19 March, was treated initially with shock - from the providers - and joy - by consumer groups and the media.
At last, so the story over the past few months has gone, the politicians have seen sense, removing people’s compulsory annuitisation and freeing them up to do whatever they want with their money, because people are “inherently sensible” and will not blow their money on flashy cars.
I’ve met a lot of Aussies. Apart from having much better teeth and tans than people in this country, they are pretty similar to people in the UK. They have jobs, worry about debt, have families that need protection, go to university, pay for weddings, houses and cars, get older and need money in retirement.
And if they have been sensible all their lives and saved - under compulsion - into a workplace pension, it is unlikely that the Aussies have been completely irresponsible in retirement and blown the lot on a souped-up ute (CORRECT). So if their money IS running out, and the politicians down under can see a later life problem that can only be solved by some form of compulsory annuitisation, should the UK sit up and take notice?
Because in 20 years’ time when I’m STILL writing about pensions, I don’t want to be sitting here (literally, spare me another 20 years of sitting at this desk) writing another blog about how the UK is bringing in compulsory annuitisation to follow the Australian model, and saying: “I told you so”.
