I am one of the lucky ones. I can buy a Lamborghini. I am slightly surprised that the government has not recommended a British luxury car, but never mind.
Lamborghini should be worried. The rush of pensioners buying luxury cars with their freed up pensions, as suggested by Pensions Minister Steve Webb, will not help their marque as the preserve of the fast and glamorous. The need for replacement bumpers and wings may however increase once the grey haired get behind the wheel.
If I offer you a lift in my new car, as you emerge from the pubs and bingo halls allegedly beloved of hard working people, you may well point out that I will regret my extravagance when I cannot afford a nursing home in the years to come.
I will reply that I listened very carefully to the free and independent advice thoughtfully provided with government funds to help me decide how to use the newly given freedom to spend my pension pot. ( I always associate pot with another word beginning with p and cannot take the term seriously).
The free advice service could be a boon to the hard strapped Citizens Advice Bureau but I fear a new phalanx of supposedly independent advisors will emerge, rather like those who mis sold pensions back in the nineties. That episode led to disciplinary action against 345 firms and compensation of £9bn.
I was taken aback that the government recommended a particular brand of car. The emerging political philosophy is one of free choice in which we elder people, who have saved hard all our working lives, are deemed to be responsible enough to make our own choices.
I don’t mind. I will settle for a Lamborghini and make a responsible decision about what colour to choose. Do they make a model, I wonder, with a hoist to lower me into the driving seat and with extra wide doors to hold a wheelchair in the back?
The Chancellor must reckon that we are smarter than our cousins in Australia who already have the freedom on how to spend their pension funds. About two thirds use the money to buy a house, pay off loans, get a car ( brand unspecified) or have a holiday. Only 1:25 purchases an annuity.
George Osborne has pulled a reckless fast one without any consultation which may turn out to undermine the collective insurance principle that allows pensioners to buy an income for the rest of their lives.
“We have to believe in freewill”, IsAac Bashevis Singer tell us, “ we’ve got no other choice”. Frankly, I am daunted by the choice ahead of me. It involves reckoning how long I will live. I hope liberalisation will wake up the insurance industry to improve their annuity products. It may be a vote winner but I fear the policy may boomerang in twenty years time as a lot of impoverished old people sup their even cheaper beer.
Neil Trotter could buy 300 Lamborghinis with his £100m winnings on the lottery last week or goodness knows how many Robin Reliants. The poor chap must have been the butt of many Del Boy jokes but has got the last laugh. “Being Trotters, we were always going to be millionaires one day” he told the press.
Neil is a motor racing enthusiast who now fancies buying a McLaren or two. Does he realise that at 745th place, he has hardly broken into the rich list? Forbes magazine cites the five richest people in the country as being worth an average £5bn each.
The lucky five include two aristocrats with the good fortune to have the best properties on the monopoly board. The Duke of Westminster owns Mayfair and the Earl of Cadogan owns Chelsea and Knightsbridge
There are two sets of the brothers, the Reubens and the Hindujas, who have both largely made their own fortunes and, at number five, our own, our very own, Mike Ashley. At £3.3bn, Mike could buy 10,000 Lamborghinis, assuming a slight discount on a bulk order.
It would be more in character for him to buy the whole factory and give the beautiful beasts pride of place on his shop floors. Current worldwide sales are shy of 2000 cars a years but may be boosted by a new model, the Huracan, due out this year and would benefit further from Mike’s marketing skills.
You have to admire Mike Ashley’s extraordinary rags to riches success. Newcastle United cost him the equivalent of 500 Lamborghinis by the way.
The moral of this column is not to decry the accumulation of hard earned wealth but to point out the increased gulf between the rich and the poor as measured by motor cars. Forget the twelve side coin, the new currency is Lambinis.
According to a report from Oxfam published last week “the five richest families in the UK are wealthier than the bottom 20 per cent of the entire population. That’s just five households with more money than 12.6 million people – almost the same as the number of people living below the poverty line in the UK. “
What’s more, the gap is increasing. To quote Oxfam again “Since 2003 the majority of the British public (95%) have seen a 12% real terms drop in their disposable income after housing costs, while the richest 5% of the population have seen their disposable income increase.” ( A Tale of Two Britains oxfam.org.uk/publications )
We know that inequality is bad for all of us. Britain has the second highest level of inequality of any OECD nation. The Equality Trust calculates that if inequality reduced to the average of these countries, we would save £39bn a year in the costs of health services and imprisonment. Life expectancy would increase for which I would need a pension.
The Chancellor should reflect that a more equal society makes everyone happier. It even reduces the chance of my Lamborghini having a nasty scratch along the side in the morning.
George Hepburn is proprietor of Bewick House Enterprises http://www.bewickhouse.com