Commuting days until retirement: 255
My unlikely hero of the hour – well, of last week, anyway – is the gentleman whose title derives from a medieval tablecloth bearing a chessboard pattern: the Chancellor of the Exchequer, the Right Honourable George Gideon Oliver Osborne M.P. I’m as cynical about politicians as most people, but just occasionally one of them does something that seems so aligned with my own selfsh interests that I develop something that looks fearfully like a soft spot for them.
In this case, of course, it was the recent budget. Before the budget, the number of commuting days you see at the top of this post was in danger of being at least doubled. It works like this: as you might not know if you’re very much younger than me, the money you are putting aside as a pension throughout your working life (or not as the case may be) is not taxed by the government; but the downside of this has always been that you were not allowed to do whatever you liked with it when you retired, however sensible your plans might be. Your only option was to use it to buy an annuity, which would supply you with an income in retirement. You could shop around for the best deal, but once you had signed up for one, that was it; you were in it for life.
With all the recent economic shenanigans, and the record low interest rates, annuity rates have been flatlining. I was increasingly aware that if I had retired in May 2015 at the age of 67,as I had planned, the income I’d be stuck with wouldn’t be what I had once expected. My best option was to hang on grimly for another year or two in the reasonable hope that annuity rates would look up a bit.
But since last week Mr. Osborne has unexpectedly changed all the rules. Now when people retire they will be able to grab it all and run – or perhaps set off in a Lamborghini or on a world cruise, as the media have not been slow to point out. I’m fairly hopeless with money, but not that hopeless; and at least there’s no need to wait around for things to look up before retiring. I can choose whatever investment option looks best for my income, and then update it as often as I want.
It still means halving my income – this is the time if life when you wish you had thought more about boring things like pensions when you were younger. But of course they were only relevant to old people, that curious species that had nothing to do with you. I was only guided into saving what I did by various advisers whose wisdom I belatedly recognise; otherwise I would probably have left it until it was much too late.
But for me, it’s worth it to sacrifice a comfortable income for the incalculable improvement in quality of life that consists in having the time and freedom to develop my own thoughts, rather than being harnessed much of the time in the traces of my employer’s narrow aspirations. (Necessarily so, but narrow nonetheless: you see why this blog is anonymous.) And so the figure at the top of this post is safe for now, and I’m starting to salivate at the prospect of jam tomorrow; maybe not today, but definitely sooner than the day after tomorrow. The jam in question may be rather abstract – not the sort of item to appear on an accountant’s balance sheet – but it’ll taste good to me. Mr. Osborne has obliged me by giving the top of the jar its first vigorous opening twist.