The con we all pay for

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The Independent Online

It is impossible to hear the world "pensions" these days without bracing yourself for bad news.

It is impossible to hear the world "pensions" these days without bracing yourself for bad news. The latest is the Pickering report, commissioned by the Government and published last week, which suggested that income from company schemes might no longer have to be index-linked and that widows' pensions could be axed altogether. Brilliant! As stock markets plunge, creating waves of anxiety about how people are going to live in their old age, I can't think of a better moment to float the idea of taking away the widow's mite. Obviously the next step should be to introduce the ancient practice of suttee, which is a fiscally efficient means of avoiding the cost of supporting all those annoying women who outlive their husbands by 10 or 20 years.

Ministers quickly distanced themselves from the plan, which would mean workers facing either a cut in future pension income or paying more each month, but I get the drift. The Government clearly thinks we are not paying enough for the things we aspire to, whether they happen to be pensions, higher education or postal deliveries at a reasonable hour. Everything is going to cost more and if that wasn't bad enough, we also have to endure sermons suggesting that the whole thing is our fault. Ordinary people treat this notion with astonishing seriousness, as though their monthly pension and mortgage payments are as nothing compared to the sums they squander on yachts and fur coats.

They also tend to keep their problems to themselves, falling back on traditional English reticence when it comes to talking about money. In Turkey, where a financial crisis of epic proportions has crippled the economy, people react quite differently; they talk about it all the time and the title of the most popular song in Istanbul clubs last summer translates into English as "I'm depressed!". Here we admit these things only in private, like the nephew of another friend who recently confessed his despair about the future. At the age of 22, he has to pay off a huge student loan, cannot imagine being able to afford a mortgage and thinks of a pension as an impossible luxury.

What kind of society burdens its young people in this way? One on the edge of a collective nervous breakdown, in my view, and too much in thrall to so-called experts. I have to say that on the rare occasions I have sought financial advice, I have always emerged (a) cross and (b) convinced that it is about as much use as a kit to build my own jumbo jet. In the first half of the Nineties, because I moved house a couple of times, building society managers made strenuous efforts to sell me an endowment mortgage; if I had taken this rotten advice, I would doubtless be getting letters from them every few weeks, warning that the policy they sold me was unlikely to pay off my mortgage.

In the wake of the pensions mis-selling scandal and other fiascos, people have rightly become wary of financial products. But the economic crisis that now looms over us is not just about pensions or the blatant conflict of interest that has come close to discrediting the entire financial services industry. The collapse in share prices on both sides of the Atlantic is a reminder that we cannot rely on volatile markets to deliver long-term financial security. Yet there is no sign of the Government stepping into the breach by offering to provide a decent state pension, which many people would pay into much more happily than private schemes that earn commission for the "independent" advisers who recommend them.

On the contrary, ministers consider loading us with extra financial burdens from week to week, either actively – a mooted charge for rubbish collections, for instance – or by default. Millions of people now feel obliged to buy private health insurance to make up for the shortcomings of the NHS, pay for private education instead of putting their children through failing state schools, support their grown-up children at university, and worry (except in Scotland) about the cost of care for their elderly parents. The new principle, it seems, is that we have to pay for services twice to be sure of getting them. This is a con and instead of being quietly depressed by it, in the time-honoured British way, we should be furious with ministers for blaming us for their failure to deliver.