Letters: Daring pension-pot raid by Osborne

These letters appear in the Monday 24th March edition of the Independent

George Osborne has rashly promised to allow savers to take all of their pension pots, subject to tax on 75 per cent of it, to be used as they see fit. This is a highly populist policy which not even Nigel Farage will be able to trump.

All the main parties have said that they will support the idea in principle and the Chancellor will have to implement it – in spite of the several disadvantages which are emerging day by day. For example, will people who are tempted to take the lump sum appreciate that they will receive considerably less (having suffered tax on its removal) than they would have had they left well alone?

Osborne will have effectively taxed, ie raided, the pension pots of anyone taking the lump sum rather than the annuity option, and he will not be around when those who may prove to be profligate need state assistance in their later years.

David Hindmarsh

Cambridge

The Chancellor promised that pensioners who retire on defined contribution pension schemes will be offered free, impartial, face-to-face advice on how to get the most from the choices they will now have. He does not say who will provide this admirable service. If he has in mind the financial services industry, let us hope that it’s not the same parcel of rogues that over the past 25 years conned us out of billions by giving us free advice, often face to face, to put our money into personal pensions, mortgage endowments, equity-release schemes, personal-equity plans, precipice bonds, absolute return funds, interest-rate swaps and payment-protection insurance.

Ian Mackersie

Whitley Bay, Tyne & Wear

Is it likely that an individual who is prudent enough to give up spending today to secure an income decades in the future will suddenly become the kind of spendthrift who, as one minister suggested, might go out and buy a Lamborghini (report, 21 March)? I think not.

Osborne’s proposals for the liberation of pensions is most likely to encourage a far greater level of pension saving; the existing alternative prospect of being forced to “invest” in an annuity which benefits insurance companies far more than the annuitant, has been extremely unattractive. It is also likely that this liberation will tilt the annuity market in favour of the purchasers as insurance companies cease to have a captive market and, necessarily, become more competitive.

David Bracey

Chesham Bois, Buckinghamshire

For nine years, I lectured to young people (19-29) starting in business, with the help of a grant from a royal charity. My advice to start a personal pension as soon as they started earning money was greeted with derision. Advice to start thinking about retirement met the same response. There is no alternative, therefore, to taxes high enough to meet both objectives. If people want to save extra, they could have a tax-efficient personal pension, which would be the icing on the cake. As your interviewee Rita Young pointed out (report, 20 March), our pensions are the smallest in Europe, and “this budget was for Tories and no one else”. She is not fooled, so why should anyone else be?

William Robert Haines

Shrewsbury

The change in the rules concerning compulsory annuities will mean that many retirees will be looking for a safe and lucrative market to place their pension-pot lump sums. One such area may well be property. Investing in this sector will surely inflate the housing bubble still further. Is this just another example of the law of unintended consequences? Perhaps. Or perhaps George Osborne knows that rising house prices always play well with the middle-aged and elderly, home-owning, Tory faithful. Unfortunately it does little to help younger people desperate to get on the property ladder.

Malcolm Harris

Grimsby, Lincolnshire

The idea that following the Government’s liberalisation of defined contribution pensions, ordinary people will blow their pension pot and then be left to a life of penury recalls the age-old prejudice about the feckless working class. Of course those with a more elevated social status, bankers for example, are well known for the care they take with money.

Keith Flett

London N17

Garden city will be no such a thing

Janet Street-Porter (22 March) is spot on about the proposed Ebbsfleet garden city. How easily and glibly the term “garden city” is used by politicians to justify and sell large-scale housing projects such as this.

The notion that builders/developers would subscribe to the low housing density, the spacious airy houses, the large gardens front and back, the integrated community amenities and the parks and woodland provided for a population drawn from all socio-economic groups that were the characteristics of the original garden cities is utterly absurd. There would be no profit in it for them.

If such a new town is to be built, let us be honest and call it something like a “prestigious and exclusive development of executive houses and apartments with prices starting in the region of £500,000”.

Nick Hudson

Welwyn Garden City

You report that 15,000 homes are set to be constructed at a new garden city at Ebbsfleet in Kent. The Chancellor has said that this will be a “proper garden city”, like Welwyn Garden City or Letchworth. This announcement, while welcome, is only one of the measures needed to address England’s need for housing. For while the garden city idea offers one concept of a better quality of life, I would question whether this is really what many people want, today or in the future.

In fact, planning permission already exists for 22,000 homes to be built in Ebbsfleet, so one would challenge whether this is truly a new garden city, or just a rehashing of an existing scheme.

The idea of garden cities, in the historical sense, may not on its own be able to solve the current housing crisis. People are still going to be drawn to the bright lights of the city. Perhaps another solution would be garden suburbs, built on the outskirts of large cities and set only a short commute from people’s workplaces. I suggest that the garden city principles (including long-term stewardship, together with the delivery of a sustainable and well-designed community) might be captured as much in that format as in a stand-alone new settlement.

Aman Sahota

Associate, Real Estate and Development, Lewis Silkin LLP, London EC4

Dungeness is perfectly safe

Contrary to your alarmist front-page story “British nuclear plant’s ‘Fukushima alert”, (19 March) EDF Energy’s nuclear facilities at Dungeness have always been extremely well protected from severe weather and seismic events.

Suggestions of a cover-up are completely incorrect. We take very seriously the need to be transparent. The local community was consulted and kept informed about our plans at all times and media were told. Furthermore we have recently reopened our visitor centre at Dungeness and have welcomed 5,000 people to see our operations in action over the past year.

Even before the Japanese tsunami, Dungeness was safeguarded against the worst flood risk that could be expected. Yet following the damage to the Fukushima Daiichi plant, EDF Energy acted with humility and leadership and worked with our regulator to establish whether there were more steps that could be taken to enhance safety.

Following an extensive programme of analysis, modelling and physical testing we decided to strengthen the flood defences at Dungeness still further. They have now been developed to an extent that the power station is protected against levels of events whose probability is vanishing small.

Similar exercises were carried out at all nuclear facilities, scrutinised by the Office for Nuclear Regulation, which has since acknowledged the safety of EDF Energy’s operations.

Martin B. Pearson

Station Director

Dungeness B, Kent

Make up has nothing to do with beauty

Alice Jones writes about the trend for women to take “no make-up selfies” (22 March). Many of us choose not to wear make- up daily. But it’s against the mainstream. I recently heard a commentator say the number of women spending money on cosmetic surgery showed the economy was on the up. No – rather it shows a culture swamped by the power of advertising.

We all have beauty within. As Benjamin Zephaniah puts it in his poem “(She don’t want to be) Miss World”: “Beauty is about how you greet /the everyday people that you meet”.

This is the beauty we should strive to develop, until it shines out of us, blinding each other with our natural radiance.

Louise Hall

Leicester

Crimea and scotland: spot the difference

The UK Government has furiously condemned the referendum in Crimea saying it is illegal and that to have legitimacy the independence issue would have to be decided by Ukraine as a whole. Perhaps it would care to explain why it has not taken the same approach over the Scottish referendum where the rest of the UK has been denied a vote?

RL Davey

Winchester