James Coney  

Mend the system and bridge the finance gap

James Coney

James Coney

In a sane world, personal financial planning would be seen as creditable. 

It would be viewed as taking individual responsibility for your financial future, ensuring that your children get the start you would like them to have, and that you do not fall into the hands of the state in retirement.

In a sane world, that would be good practice.

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Thanks to the modern day Labour party, and the ineptitude of the Tories for allowing it to go unchecked, we are not in a sane world. 

Instead we are in a time where wealth creation through saving and investing is suddenly seen as damaging to the economy. 

Labour’s various policies would seek to increase taxation on savings, cut reliefs and target those with any kind of build-up in wealth.

Take a look at its plan to redistribute 10 per cent of the shares from Britain’s biggest companies and hand them to workers – this would hit pensions to the tune of £31bn according to a report by the Financial Times. 

The party’s proposals to scrap private schools are just an attack on choice. 

It is hard enough to get people to save into a pension as it is, without the anti-capitalist rhetoric that admonishes wealth creation.

We should have a system whereby the state pension provides you with the bread and butter you need for retirement; if you want any icing on the cake then you are going to have to save for that yourself.

That strikes me as a fair compromise, even though our state pension remains one of the worst in the developed world.

And those who take responsibility deserve incentives to do so, such as tax breaks.

With any of these policies it is never the rich who pay – it is the middle classes.

We know already that the very wealthy are setting up tax structures to move their money should Jeremy Corbyn get elected.

Many big companies are also looking at how they can protect their capital.

It will be those in the tiers below, who do not have the cash for sophisticated tax planning, who will pay the most.

It will exacerbate the gulf between the very rich and the poor.

And lest we not forget that auto-enrolment has been a great democratic exercise that has helped to grow the number of people exposed to the stock market by 10m.

Rather than stigmatising these investments we should be encouraging more personal responsibility, more accountability, and more engagement so that people take a greater role in planning their retirements.

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