A Budget betrayed

Financial Adviser

Chancellor George Osborne has released another Budget whopper with his plan to introduce legislation enabling annuitants to access their remaining pension pots.

He has stopped short of including defined benefit schemes in his transformative pension reforms, but putting a stop to some life offices blatantly taking advantage of the vast majority of annuitants is a necessary step.

At Financial Adviser we have been among the first to raise the alarm about those spendthrift pensioners who could access their pots and blow the lot on cruises, new motor vehicles and getting drunk every day. But we have more confidence in the Great British public, and believe they will be more prudent with their money.

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What puzzles us is why a large minority of people should think that in the 21st century people should not have access to their deferred salaries (remember: a pension is deferred pay) and that they know better than the owners of the cash how that money should be spent.

A run on annuities can be the final straw for some of those life offices with broken business models from the days of warehousing large sums of money. However, there has been a long tradition in which chancellors go in to purdah approaching the Budget and, if even the smallest item is leaked, it can be a resigning matter.

Gone are the days when tabloid journalists used to bribe printers into disclosing the Budget’s content. Some weak printers have even been prosecuted for taking the tabloid’s shilling. What we have had, in this more open, disclosing political culture, is a chancellor going on a popular Sunday morning television programme, and without a whimper, disclosing an important item in his forthcoming Budget.

What is even more worrying is that the Shadow chancellor appeared on the same programme and not a word was said about resignation. Times have certainly changed.

Even if Budget secrecy is not a constitutional requirement, it is certainly a grand parliamentary tradition, one that is highly cherished.