James Moore: Young and old can take heart – at least it’s not as bad as in Mexico
Outlook: Only way of being certain of a retirement in relative comfort is to join the public sector
As if the current chilly weather with its attendant crop of viruses weren’t enough, up pops the OECD with one of those league tables showing how rubbish her Britannic Majesty’s United Kingdom of Great Britain and Northern Ireland is.
In this case it’s pensions that are in focus: apparently our state offering is among the worst in the developed world. Only Mexico fares worse. Ouch.
Actually, there’s a little more to it than that. The OECD recognises that while public spending on pensions is low here, those on lower incomes are proportionately better served than in some other countries while the better off tend to have their meagre state rations supplemented by private schemes.
These used to be some of the world’s best until successive governments wreaked vandalism upon them. Previous Conservative administrations allowed firms with well-funded schemes to take payment holidays when the stock market was booming, which contributed to the problem of funding deficits that will be with them for years. They also dreamt up the opt-out, which the pension industry gleefully used to indulge in an orgy of mis-selling. Then Gordon Brown launched his smash-and-grab raid on pension funds by abolishing the dividend tax credit.
The Coalition has, at least haltingly, sought to address the very real fears of the country ending up with a vast number of poverty-stricken pensioners in the future. Some of its proposals make sense, such as auto-enrolment into workplace schemes. Some, not so much. The “defined ambition” pension, for example, is a silly name for a lot of woolly ideas.
In fact, the only way of being certain of a retirement in relative comfort is to join the public sector. Beyond a bit of tinkering, its unfunded but guaranteed pensions remain in place, despite the rapidly rising cost of providing them.
The benefit that the Government’s private sector reforms will offer is open to question. As the independent pensions consultant John Ralfe has pointed out, auto-enrolment isn’t a magic bullet. You can opt out.
With PricewaterhouseCoopers projecting that the average student debt will be £40,000-£50,000 by the time the 2012 university intake graduates, and the need for people to start saving for a deposit as early as they can if they ever want to buy their own home, a sizeable group of young people may very well decide to take that route.
It’s actually worth sparing a thought for the young in the wake of that OECD report because it isn’t just those in higher education who have taken a kicking. A million young people are classified as Neets, Not in Education, Employment or Training. Assistance and benefits to this group has been squeezed and squeezed again.
Perhaps it is the young, rather than the old, who should consider jumping on a plane. Even one bound for Mexico. At least it’s warm there.
Online gambling firms could have their goose cooked
The United States has long been viewed as the goose that will lay golden eggs by Britain’s online gambling companies.
If only they could nip up the beanstalk and spirit it away from puritanical conservative Republicans and the Department of Justice with its liberal interpretation of the wire act.
Well now the beanstalk is falling, bringing the goose to them. Yesterday Betfair announced the launch of betfaircasino.com in New Jersey, the state that has been wielding the chainsaw. Sensibly it’s working with Trump Plaza Associates, which holds a New Jersey gaming licence.
Others have made similar announcements in recent weeks. Gambling may be seen as a social ill, but it does provide a lot of tax and the lure of the dollar always eventually holds sway Stateside.
Time to pile into gaming stocks before the goose starts to lay then? Have a care. Just because the US is opening up for business doesn’t mean every British gambling company is going to back a winner.
Just getting the internet right here, where it’s legal, has proved decidedly difficult for some very big names. Just ask Ladbrokes. Before you join the gold rush, follow the golden rules of gambling: study the form and don’t bet what you can’t afford to lose.
If Lawton still doesn’t get it then we have a big problem
More red faces in City regulation with MPs putting the boot in over the decision to allow miner ENRC to list in London.
It’s clear now the sort of laissez faire attitude among regulators that allowed bankers to inflict so much damage also infected the UK Listing Authority that allowed this unlovely lot to secure a premium listing.
It almost beggars belief that David Lawton, who heads the UKLA, was not aware lawyers from Herbert Smith had carried out a critical audit on ENRC months before it joined the market. Instead he was content to rely on information supplied by the sponsors of thefloat.
His response to the MPs’ outrage was instructive. He said the UKLA regulated markets, not companies’ corporate governance or tax or employment practices. ENRC ticked his box, and he passed the buck. The result? A mess that has seriously damaged London’s reputation as a financial centre. If this sort of thinking is still prevalent across the Financial Conduct Authority then, Houston, we have a problem.
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