Errr... no

There's some wobbly thinking in this here comment piece on pensions in the Telegraph

Longer lifespans mean we must save more and work longer or retire in poverty. You can opt out of saving but you cannot opt out of growing old. But that does not mean the Government should nationalise our savings, which is what its new auto-enrolled scheme amounts to.

I think the phrase "amounts to" is being used here in the less common sense of "is not at all like". I think a reasonable interpretation of 'nationalisation' would be that the assets are taken into public ownership. Yet that clearly isn't happening under auto-enrolment. Either you are auto-enroled into your employer's scheme, so the assets remain in the trust in a DB scheme or in your own account in a DC a scheme, or you go into Personal Accounts, where you have your own fund. There is absolutely no question at all that the state takes ownership of your assets. (indeed one argument for having a funded national scheme is that politician's can't muck about with it so easily).

What's more the state isn't even going to invest those assets, that will be done by the scheme's asset managers, and scheme members will have a (limited) choice in how to spread their assets around. Theoretically I spose the govt could have, say, expanded UKFI's remit and given it the job of investing the assets of the scheme, but it has not done so.

To be clear: there is no basis whatsoever for saying this scheme amounts to nationalisation of savings.

A Conservative solution to the problem of inadequate saving would be to improve incentives for voluntary pension contributions.

Assuming this is a Conservative who does not accept the arguments in Nudge which advocates auto-enrolment if I remember rightly. (and as I've blogged bwefore, Thaler's research was quoted to back up the introduction of Personal Accounts).

That need not involve extra costs in the form of tax breaks. For example, the Budget proposals to give savers greater choice about how they spend pensions savings, by removing the compulsion to buy a guaranteed income for life in the form of annuitiies, will make pensions more flexible and attractive. Savers do not like being told what to do with their own money.

Once again, I would have thought that anyone who has read much research abour decision-making in relation to saving would reach very different conclusions. Many people find the decision about whether and how much to save too difficult, and put it off, and would rather be guided. Flexibility is only attractive to some.

Pensions would be even more attractive if we knew we could get access to the money earlier in life when we needed it; perhaps to fund a business or buy a home. This flexibility already exists in America and there is no reason it could not be introduced here.

The first bit here merits re-reading because it is a bit contradictory. In essence the argument is that pensions would be more attractive if they weren't pensions. Or to put it another way, we would save more for retirement if we didn't have to use the money we have saved for retirement for our retirement.

Now I'm not actually opposed to flexibility in relation to savings, and there is room to innovate here. But I'm not convinced that opening up retirement savings for other uses is going to be a good way of helping people fund for retirement in the long run. Over time won't people start seeing their pension as just a savings account that they can dip into? And won't we tend to overestimate our need for the money now rather than in the future?

This is a more complex argument than flexibility = good.