October 5, 2012 7:34 pm

Permission to raid the pension pot

‘They say you can’t take your money with you, but I had assumed I could at least hang on to it while I was still alive’
An illustration by Lucas Varela©Lucas Varela

So I can count on your pension when I need my own home,” said the boy, with a look of malign triumph on his face. He’d heard about Nick Clegg’s plan to let people loot their retirement pots to help get their kids on the property ladder. Suddenly the notion of home economics took on a new and sinister meaning.

Frankly, I was concerned. Once, you only had to worry about the kids booking you a short weekend in Zurich. Now I can envisage an older version of the boy poring over my pension statements with all the compassion of a hedge fund manager totting up his commission. They say you can’t take it with you, but I had assumed I could at least hang on to it while I was still alive. I assume this idea was all part of that wildly successful apology strategy that the Cleggster sprung on us a fortnight ago. First, he says sorry for stiffing the students he promised would be spared an increase in tuition fees; then, to make it up to them, he comes up with a new way for them to sponge off their parents. Personally, I’m only too happy to live out my twilight years in penury if it will help Nick off his political hook; it’s what we taxpayers are there for. Seriously, who needs a secure retirement when you can blow the lot on a shag-pad for the boy?

In fact, to hell with it; let’s go the whole hog and bail out British business too. Instead of wasting all this rhetoric and civil service time on generating loans for small companies, why not let them raid our pension pots as well? I mean it; stuff the cruise, I’d be delighted to bet the lot on some half-baked entrepreneur who’s just been thrown out of the Dragons’ Den after demo-ing the new Sinclair C5. Can’t get a bank loan? Well come on down to the Bank of Mum and Dad; we’re always open for business.

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Robert Shrimsley

I can see some upsides in the Cleggster’s gambit. Such a move will surely help improve the spawn’s financial literacy. I expect them to start reading the money pages and trying to sell me cash ISAs. Although it’s not as though I’m wanting for financial advice at the moment. Ever since my bank incentivised branch managers to get out and market products, I’ve been hounded by a man who calls himself my relationship manager and tries to sell me fixed rate savings bonds. (It is a fascinating pitch that runs along the lines of “Have you seen the measly rate of interest we are offering you? With this Somalian sovereign debt you can double your return.”) On the other hand, I do like the idea of having a relationship manager. “I say Smithers, could you call my wife and tell her she’ll have to empty the dishwasher without me. Do send my apologies.”

Not that my kids need that many lessons in financial literacy; they have the precision of debt collectors when we owe them money yet remain reliably elusive when the direction is the other way, calculating correctly that we’ll forget about the odd couple of quid if they can just stall for long enough. And that’s another worry. We take an indulgent attitude to this, but mortgage lenders tend to frown on it when it comes to repayments.

So I do worry about giving the spawn this stake in my retirement. Of course I’d expect them to come to me for help if I could give it – in fact, I’m not sure they’ve developed any other strategies over the years. But incentivising them to help me manage my finances seems something of a double-edged sword. I suppose it is encouraging a sense of personal responsibility in them; or rather encouraging them to encourage it in me. “Do you really need that iPad? You should think of the future, stick that money into your pension.”

What really worries me, however, is the psychological manipulation. We’ve already experienced the emotional extortion deployed to secure a cool smartphone. “I’ll look like a complete loser with the iPhone 4. Dad, you need to step up.”

Although, now I think about it, this could be the counter-offensive. “Sorry son, I’d love to get it for you, but I’m saving for your first home. How about this rather stylish Nokia nerdphone; just £25 at WH Smith.” Yes, now I think about it, perhaps old Clegg was on to something.

robert.shrimsley@ft.com

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