NEST Pensions

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The Daily Mail seems intent on starting a row about the new national pension scheme that Labour planned and which the ConDems have endorsed.

I do have revisions about the timing of the launch of this scheme. Eight percent of pay (admittedly not all pay in the UK — but a sum vastly bigger than the £3.2 billion the Mail claims to be involved, I suspect) is a significant sum to force into pensions at this moment. That’s not because I have a problem with pensions at all. I don’t. But these pensions will, I have no doubt, be invested in the same way as conventional pensions — which means the vast majority will end up being speculated on shares.

Over the last decade after pension fund charges saving in this way has paid negative returns.

More important, as I explained in ‘Making Pensions Work’, this is not investment activity. It is savings activity. This heightens the risk of recession by draining money out of the r4eal economy at this time and it does not create a single new job because buying shares does not create worth — it just transfers it, or creates the false impression of wealth in the seemingly inevitable boom and bust cycle of the stock exchange.

Unless these pension fund monies are to be directed to the creation of real jobs in the real economy for the benefit of ordinary people this new pension fund will just be another example of the capture of the wealth of ordinary people for the benefit of the City. That’s what pensions have been to date. We cannot make the same mistake again.

But at least NEST — the agency responsible are listening — I am meeting them soon, at their request.