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Three Steps to Heaven?
Tensions in the Management of Welfare: Retirement Pensions and Active
Consumers
Dr Kirk Mann, School of Sociology and Social Policy, University of Leeds.
Accepted by Journal of Social Policy
Abstract.
This paper explores some of the emerging tensions in the management of welfare in
Britain. The success of Labour’s proposals for welfare reform, particularly retirement pensions, hinges on their ability to promote the idea of the consumer citizen and to undermine traditional ideas of citizenship rights. However, managing this transition, including the presentation of ideas and the management of consumers, has not been straightforward. Whilst the Government presents retirement as a matter of lifestyle choice welfare “consumers” are demanding more of their providers and are regularly disgruntled with the response.
Simultaneously pension providers are expressing reservations about their ability to manage aggrieved consumers. Furthermore they believe pension fund management has been politicised and their scope for discretion reduced by regulation. Whilst technical and scientific developments in terms of portfolio management, and risk assessment have changed the working practices of those in the pension industry.
These tensions between consumers, providers and legislators may generate further dissatisfaction with the balance of rights and responsibilities being hotly contested.
(Key words; consumers, citizens, retirement, pensions, Labour, providers).

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Three Steps to Heaven?
Tensions in the Management of Welfare, Retirement Pensions and Active
Consumers 1
Dr Kirk Mann, School of Sociology and Social Policy, University of Leeds.
Introduction
The British Labour Government’s attempts at welfare reform hinge on a change of culture and behaviour among virtually all sections of society. Passive “welfare dependency” has to be challenged and people must be prompted, compelled if necessary, to take more responsibility for their welfare needs. Paid work is seen as the route to independence and many commentators have focussed on this and
Labours’ emphasis on “rights and responsibilities” within the “Third Way” project
(Driver and Martell 1998, Dwyer 2002, Deacon 2002, Alcock et al 2003). Initially the paper explores proposals for changing the culture and behaviour of people prior to retirement. It will be suggested that despite the language of choice the threat of compulsion remains for those who fail to invest in the finance markets. Suitably educated and well informed citizens are presumed to become active and discerning welfare consumers (Clarke 2004). Paradoxically these “heroic consumers” (Warde
1994) may be a relatively small proportion of the population but they persist in posing some difficult problems for the mutual associations, insurance companies and pension funds charged with addressing their needs and expectations. Changes in the working practices and technologies of pension experts, legislation and regulation that demand transparency from providers, and more accessible complaints procedures, are all adding to the tensions between legislators, providers and consumers. Finally the implications for social policy analyses in relation to welfare recipients, “experts” and professional providers will be briefly considered with the concepts of performativity and ideology contrasted.
Cultural Change
The largest category of “passive welfare dependents” are retirement pensioners and advocates of the “Third Way” have highlighted this fact for some time (Giddens 1994, 1998).
Traditionally social policy has been centrally concerned with retirement pensions and the rights of older people (Titmuss 1958, Townsend, 1979). As a number of recent accounts point out there are also many older people who still subscribe to a traditional view of welfare and citizenship rights that owes more to Marshall’s model than “New” Labour’s (Dwyer, 2000,
Craig 2004). For advocates of the “Third Way” and the present Labour government, however, these are traditions that need to be challenged and changed. The primacy of paid work in
Labour’s welfare reform project, along with the criticisms of this are well known (Williams
2001, Levitas 2000). Much of the criticism has centred on unpaid work, care, exclusion from paid work, and the rhetoric of conditionality, with no rights without responsibilities attracting most attention (Mann 2003, Taylor-Gooby 2001, Levitas 1998, 2000, Dwyer 2004). Among other points critics highlight the constraints that a great many people confront in accessing a good pension scheme with 11.3 million people in paid work not contributing to any private or occupational pension scheme (Turner 2004). With employers closing their defined benefit
(DB)schemes and the finance markets performing poorly many people are understandably confused (Pickering 2002). In these circumstances they do not want to take risks and many simply lack the resources that would enable them to develop the “autotelic self”, and thereby become reflexive, pro-active social actors; “able to turn entropy into a consistent flow of experience. The autotelic self does not seek to neutralise risk or to suppose that ‘someone else will take care of the problem’; risk is confronted as the active challenge which generates selfactualization (Giddens 1994:192)”.

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Less has been written about those that have sought to take care of their own welfare needs and how their welfare providers are responding and the tensions this can generate
(see Harrison, 1990 for an exception). However, before exploring some examples of the tensions that are emerging it is important to establish the nature and scope of New
Labour’s project.
The central themes in New Labour’s welfare reform agenda have been clearly articulated by Giddens since the mid 1990s. These are most apparent in respect of retirement pensions that represent “a form of welfare dependency much more widespread than any of the dependencies noted by the rightist interpreters of the underclass (Giddens, 1994:170)”. Consequently older people are frequently confined to “a retirement ghetto” (Giddens, 1998:120). The themes of dependency and passivity were replayed by the Labour Government shortly after being elected. The publication of “New Ambitions for our Country” and “Partnership in Pensions" (DSS
1998a, 1998b) were primarily concerned with shifting responsibilities in the future by trying to motivate those in work to save. The central message was educational -future retirees must learn to plan and not look to the state. As Alan Walker made clear little was said about existing pensioner poverty, and the modernising project was, therefore, to get subsequent retirees, current workers, carers and consumers, to make their own provisions, to change their behaviours; " ..by finding new ways of using the state to impose the discipline of the market on its population (1999:538)". Against a backdrop of dire warnings from the OECD (1998) and demographic predictions that persistently pointed to an impending public pension crisis the Government sought to shift responsibility onto individuals and private pension providers. The key mechanism would be the new Stakeholder schemes offering low administrative charges and relatively low contributions. It was claimed that these would enable poorer workers and carers to subscribe and thus pensioners of the future would not fall into the dependency ghetto.
Whilst the Government presented Stakeholder schemes as offering more choice it was plain that individuals were expected to make the right choices. They needed to be saving more, working for longer and expecting less from the state. Alistair Darling, the then Social Security Minister, stated that, “..once stakeholder pensions are established, it is my intention to ensure that we amend the system further so that, if people stay in the state system, they will lose money. (15 December 1998 Hansard,
Vol.337. col 771)”.
Stakeholder schemes have, however, proven rather difficult to establish and even the lavish Government “advertisements” for them have been withdrawn, following plunges on the stock-market. The government claims that over 1.6 million stakeholder pensions had been purchased by the end of 2003 and that 350,000 employers offered access to a stakeholder scheme (DWP. 2004:13). But the value of many of these pensions is likely to be relatively low and 82% of the employers schemes have no members and only 13% of employers contribute. The Association of British Insurers concluded that “stakeholder pensions have stalled” and Government needed to take
“significant action” to promote them (ABI 2003). In response the Government continues to focus on turning inert individuals into active planners, but should this fail, compulsion is a distinct possibility (DWP. 2004:1, Turner 2004:1).
The commitment to changing passive welfare subjects into active lifestyle managers has been reiterated time and again by Labour Ministers. For example, and among a number of similar assertions dating back to at least 1995 (Deacon 2002,105-106),
Tony Blair stated “I hope that our actions as a Government will also promote a wider change in attitudes. This cultural change is a long-term project, with high stakes.

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(Foreword to P.I.U. 2000).” The PIU report was explicitly concerned with the labour force participation rates of the over 50s, echoing OECD (1998) fears about early retirement at a time of relatively low unemployment and growing skills shortages.
Working and saving are portrayed as unequivocally good for the individual, good for the economy and, in so far as they promote prudent habits more generally, good for society.
Choice and flexibility.
In December 2002 another Secretary of State for Work and Pensions, Andrew Smith, introduced his Department’s Green Paper;
Simplicity, security and choice:
Working and saving for retirement: “Our aim is to help people choose how they plan for retirement, how much they save and how long they keep working (DWP 2002:v)”.
Four key proposals are set out: First to “help people make better informed choices”.
The second reaffirmed that employers have a part to play but admitted a need for
“greater protection for members of occupational schemes”. Third to encourage simple savings products and broaden access to financial services, and finally, to
“introduce measures to extend working lives” (DWP 2002:1). All this because: -
“Many older people are leaving work unnecessarily early (DWP 2002:12)”.
The tax system (fiscal welfare) is central to helping people make the right choices and further tax breaks are proposed to encourage longer working lives. These financial carrots are dangled in order to promote Blair’s “cultural change”. Reflexivity - translated as choice by the merchants of spin - in this context requires some careful economic calculations, rather than decisions over identity and lifestyle. For those who might still make the “wrong” choices an ‘independent’ pensions commission was set up; “to advise whether there is a case for moving beyond the current voluntarist approach” (DWP 2002: v). Simultaneously the Inland Revenue/Treasury Green Paper
“Simplifying the taxation of pensions: increasing choice and flexibility for all” included the following announcement: “The concept of normal retirement age will vanish from tax legislation (2002:2)”.
The language of choice and flexibility riddles both the DWP (2002) and Inland
Revenue (2002) papers (Mann 2003). There are a number of consequences that follow for social policy and public welfare services in general when ‘the consumer’ is promoted as the force for change. “Above all, ‘the consumer’ is held to mark a shift from ‘passive recipient’ to ‘active choice maker’ in relation to services” (Clarke
2004:39). Certainly Labour want to promote a particular type of consumer but this is not a straightforward project within a completely free market. Because of popular attachments to certain public provisions and previous failures in the private market
(e.g.; the mis-selling scandal of the early 1990s and the Equitable Life fiasco) it has proven necessary for the state to interfere in the market. Tax relief on pension contributions may be the carrot but the stick of compulsion is constantly being waved along with increased regulation for providers.
The three step strategy.
By February 2004 in the Foreword to Simplicity, security and choice: Informed choices for working and saving Andrew Smith, states boldly (literally) how he believes that everyone can be enabled to plan ahead for retirement with confidence.
“The strategy that I have set out is based around three steps – activation, education and information.
” (DWP, Feb 2004:v, emphasis in original). These three steps are intended to awaken the passive welfare subject to the idea of becoming an active consumer citizen and lifestyle manager. They follow on from the previous initiatives and are designed to shift responsibility for a “good” retirement income from the state to the individual and the financial services industry.

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What is somewhat different is the fact that Andrew Smith makes plain the mechanisms he hopes will promote a change in behaviour and he does so with a flourish. The “three steps” he identifies are hardly real social policies but are instead activities, training and propaganda exercises with which individuals are expected to engage. After seven years of being encouraged to choose it is still the case that
“…..many people are under-providing for retirement”. Plans are in train to “…give individuals new and more attractive options to save or work for longer. At the same time the Government established the Pensions Commission to investigate whether we need to move beyond the existing voluntary system” (DWP. 2004:1).
It should be noted that by 2004 The Pensions (Turner) Commission had moved to centre stage. As the Commission stated in October 2004 it was considering four options to deal with “the pensions crisis” as many commentators described the situation 2 . The alternatives were presented as; 1), accept declining pensioner incomes, 2) increased tax and/or national insurance contributions, 3) raising the retirement age, 4) compulsory saving. The Turner Commission is due to report next in the Autumn of 2005, which is widely predicted to be shortly after the general election. A good time perhaps to break bad news` ?
The government have made it quite clear that options 1 and 2 are not being considered and that some form of compulsion, either to save, or to continue working beyond 65 years of age, is likely since; “ there are still too many people who, because of a lack of understandable and trusted information, do not engage with the choices they have, and as a consequence, make no choice at all. [….] We believe the public will be better served by a more fail-safe system where people are less likely to end up with severe under-provision purely because of inertia” (DWP 2004:1).
It is important to note that inertia refers here to individuals not the Government, nor employers who are closing their defined benefit (DB) schemes. Labour’s interpretation of orthodox political economy’s “
Free to choose
” (Friedman and
Friedman 1980) loses something in translation and reads more like “compelled to choose”, whilst those who fail to choose are held responsible for their exclusion
(Bauman 1998). Likewise the meaning of a “more fail safe” pension system is interesting and open to interpretation.
Activation
Activation is promoted to tackle the problem of “individuals passively failing to take advantage of saving through the workplace” (DWP. 2004:15). There are basically three elements to activation. The first is to compel individuals to decide whether to join their employer’s scheme, or not. The second is to suggest that employees “precommit to save more in the future”, thereby foregoing wage/salary increases that will instead be paid into a pension scheme. A third option is to automatically enrol all employees into Defined Contribution (DC
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) schemes where their employer has one, unless they actively opt-out. Where employers only offer access to a stakeholder scheme the possibility of compelling employees to contribute is to be explored (DWP
2004.16-17).
The focus is firmly on the inert individual in paid employment. Carers and those with a tenuous relationship to paid work get scant attention. Nor do the social responsibilities of employers warrant serious consideration. Thus there are no proposals to compel employers to contribute towards their employee’s pension, despite the fact that pension schemes can serve to retain and attract workers, and early retirement is frequently used to shed labour during economic downturns and when
‘restructuring’ occurs (Kohli et al 1991, PIU 1998, Vickerstaff et al 2004). This is in

6 marked contrast to the Australian Superannuation Charge (1992) that compelled all employers to contribute to employee funds (Mann 1993, Olsberg, 1997).
The evidence cited by the DWP (2004:16) is largely drawn from events in the USA where similar proposals in relation to 401(k) schemes
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witnessed participation rates rise by up to 25% prior to the stock market falls of 2003. Whether those who made these “active decisions” are currently as enthusiastic about the success of this “natural experiment in saving” (Choi et al 2003a) is not considered
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. Nor is there any discussion of the fiscal subsidies that provide a carrot to US employers who pay into
401(k) schemes. Similarly the stick driving many American employees to join schemes needs to be borne in mind. In 2002 a dire situation confronted many US company’s DB schemes in which; “hemorrhaging corporate pension plans…[…].. have lost hundreds of billions of dollars” (
BusinessWeek, 05.09.2002, p44). Whilst
The Economist (10.05.2003) noted both the distorting effects of the tax subsidies for employers in the US and that:”[I]n America, many companies stuffed their employees pension accounts with their own stock (a bad idea, if your employer is Enron)”.
Clearly some employees in the US have been made more “active” by reforms that were intended to lock them into their employers 401(k) schemes. Others may well have looked at company malpractices and contribution records and opted for the
“safer” option. But as with the Maxwell scandal, AWS collapse and mis-selling scams in the UK
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the impact on potential pension purchasers can not be read off as easily as the British Government presume. Nor is it clear that those US employees who have been activated and locked in have better financial returns than if they had invested their money in, for example, their own homes or antique furniture.
Education
Education is the second step that the government is taking to ensure that; “people approaching retirement are better informed about the choices they face. For example, their options around when to retire, opportunities for flexible working, or the timing and nature of annuity purchase, as well as understanding the implications of those choices on their potential retirement income (DWP 2004, 19).” Financial knowledge and understanding are crucially important because, as the Government recognise, the market for pension products is complex and purchasers are vulnerable if they do not understand what it is they are buying. Education about pension products and financial services will therefore be promoted to children via the National Curriculum and the
Financial Services Authority (FSA) is developing a national strategy for financial education. “We believe that all children should have the opportunity to build up the necessary skills to enable them to make appropriate financial choices throughout their lives.
(DWP 2004:19 emphasis in original). This clearly promotes
Giddens’s (1994,1998) idea of active lifestyle managers in a world of well informed consumer citizens. Although the prospect of 14 year olds mulling over the performance figures of various pension funds, or debating the respective advantages of a conventional annuity programme vis a vis an income drawdown programme seems remote (Blake et al 2000, 1999.). However, these are the sort of complex issues that individuals will need to appreciate, among many others, if they are to make informed choices.
Information
Information is heralded as the third step and in keeping with the Third Way this too ought to promote lifestyle planning. “We think that personalised information makes a difference and prompts people to think about their retirement planning (DWP
2004:25)”. An integrated retirement planning service that will include: a telephone helpline, information leaflets giving details of pension products and services “to

7 support people in making choices” (DWP 2004:20), a website that offers guidance on government services and sources of information, and a web-based retirement planner is being developed that will offer pensions forecasting and planning services to all. In addition powers in the “Pensions Bill will require employers to ensure that their employees have access to a decent standard of pension information (DWP 2004 23)”.
In order to encourage people to remain in paid work the Government will offer people: “‘What if’ forecasts that will show the impact of deferring their State Pension beyond State Pension age” (DWP 2004:26). Reserve powers in the Pensions Bill will enable the government to compel all pension providers and employers to deliver combined forecasts of state and private pension savings (DWP, 2004:27). Other proposals and measures are intended to either push people into paid work, and thereby give them access to a private (DC or DB) pension, or to provide them with information targeted at their needs; eg; the self-employed will have a dedicated helpline and unemployed people over 50 can expect the New Deal 50 to assist them back into paid work.
Web-based information has a central place in the Government’s strategy of activating the consumer citizen. Although government and pension providers in the USA and
Australia have been using the internet for some time UK governments have been slow to appreciate the possibilities and implications. The US Government has a sophisticated (by UK standards) array of websites giving users access to information about entitlements, age specific data regarding when they can retire and links to other relevant sources of information. The DWP website (www.dwp.gov.uk) offers information via link buttons: - “ I am planning ahead ”, “ I am approaching retirement” and “I am retired”, along with “Get a Forecast” and
“Did you know..?”
.
For the pensioner population and prospective pensioners there are counter-veiling possibilities in the development of Web based materials.. On the one hand the new modes of information (Poster 1984, 1990) could be used to enable greater access to data that relates to benefits, and for individuals to keep track of their entitlements.
Using a computer from home also allows for more detailed and personalised forms of communication between welfare recipients, pension scheme members and administrators/providers than 'information booklets'. This could ensure public welfare recipients are not exposed to the stigmatising glare of the social security office
(IDS,1999.364). All of this could be done electronically without the need for intrusive inquiries or overt means testing.
On the other hand the individualising effects of information technologies could further isolate and divide the pensioner population. The potential for exclusion lies in the ability of the technology to be more precise, clearer and more tightly tailored to the individual. Pension providers may want to use the potential that this mode of information offers for their own ends. Reliable information on employment history, contribution records, medical records, leisure activities and likely beneficiaries could be used to firm up actuarial predictions. The information would ensure more accurate assessments of the risks an individual undertakes and the costs this may impose on the fund. Such information could be used to ensure that individuals are not classed with others of the same age, gender, social class or income bracket when they, or their behaviour, differs. On the face of it this would seem to be quite reasonable until we note that the more accurate actuarial predictions are the more regressive will be the effects, in terms of contributions and benefits. Instead of spreading risks within fairly broad bands across different population types, which has the potential for a measure of redistribution on the basis of need, the tendency is likely to be to identify high risk, and/or low contributing, individuals. These might then either be excluded completely,

8 as often happens in high crime areas where residents are refused contents insurance, or confined with others of the same type to a poorer scheme. Although the information itself is apparently neutral it is could be used to the disadvantage of particular groups. With the possibilities that genetic testing offers, private pension companies already seeking detailed information about the ‘risks’ that individuals undertake and with providers already offering preferential annuity rates for people with “impaired lives”, pessimism may be justified (Dyson 1999, Fitzpatrick 2003,
Mann 2001).
Performativity.
Presentation without principles, style over content, media management and a “culture of spin” are by now familiar charges against the Labour Government (Corner and Pels
2003, Paxman 2002). Retirement and pensions policy are no exception but on the contrary there is a deep seated concern with managing public opinion. Eradicating inertia and getting people to take an interest in pension planning are explicit objectives of government policy. Interacting with Web-based information is clearly thought to be one of the means to attain the objective. In this context the
Government’s strategy can be understood as a form of performativity. According to
Ball (1998) perfomativity "works" in three ways. It disciplines, transforms and has the effect of re-framing the language of social 'problems'. Information is conveyed through performance, the observer is expected to engage and then to reflect on the appropriate response. In the case of Web-based information the viewer is engaged via their PC and is clearly meant to seek further information and subsequently a suitable private pension provider. This apparently neutral mode of information (Poster 1990) is supported by ‘facts’ that are tailored to the individual. For example, details of contributions to different pension schemes, age specific retirement dates with predictions showing improved retirement income if the date is deferred, forecasts of annuity returns predicated on health and risk taking activities, may all serve to activate the formerly passive welfare subject. Over time the inter-active requirements of Web-based materials works upon the individual to re-frame the problem of pension provision. Seen in this light pension and retirement rights are no longer to be demanded of the state, or employers, but become the responsibility of individuals.
Along with the prodding stick of “creeping conditionality” (Dwyer 2004) the carrot of being an active consumer, saver or lifestyle manager, is dangled in order that individuals will get "themselves 'interested' in their own government" (Rose
1996:146). Clearly passivity is bad, activity is good, and whilst the stick is “reserved for the poor” (Deacon and Bradshaw 1983), the carrot may remain out of reach for a significant proportion of those tempted to consume it.
A key point here is that in the past government information tried to change behaviour through information leaflets or ‘the man from the Ministry’ talking at the passive viewer. But this will fail to engage a media literate audience that will often read the message as patronising or authoritarian (Corner and Pels 2003). Educating the masses by rote, simply telling them what to do, is regarded as a pedagogic failure in an era when people are both more media literate and sceptical of politicians. Populations must 'learn', they can no longer be 'taught' and in order to learn they need certain
'skills'. Skills require training and that is a hands on activity (Smart 1992:169-176.).
Clearly the Government is investing a great deal in new web-based materials and the three step strategy – activation, education and information – would suggest that they believe that this mode of information will “work” for them. That is not to suggest that they are necessarily aware of performativity as such, but this is a media savvy

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Government and the US experience of using Web-based materials is familiar to them
(Mann 2001:146-151. Paxman 2002).
The long term nature of retirement saving and pension provisions militates against any short term assessment, and as noted previously for the Prime Minister “This cultural change is a long-term project, with high stakes. (Foreword to P.I.U. 2000)”.
Consequently it is worthwhile exploring what is at stake and who is taking the risks.
In short legislators, consumers and providers are involved in a sort of ménage a trois, with no one prepared to accept responsibility for the tensions generated.
Legislators
Legislators generate tensions by any intervention they might make but most obviously by offering tax incentives (fiscal welfare) to promote the private pensions market.
These have been criticised by both the political “Left”, for their regressive features, and the “Right”, for their market “distortions” (Littlewood 1998, Sinfield 2000, Minns
2001). Moreover, the lessons of the mis-selling scandal of 1989-1992 do not seem to have been taken on board. The Government seems to think that the fundamental problem was that poorly educated buyers were dealing with poorly regulated sellers.
Hence the proposals for education, information and more regulation. However, the stimulus that prompted the debacle was the discount offered in the form of tax breaks(Disney and Whitehouse 1992). Contributions were to be tax free, in effect, a
£6 billion subsidy from the Treasury, or rather from taxpayers in general. Thus, depending on the appropriate tax band, there was a 20-40% discount for individuals on private pension contributions and these immediately made private pensions an attractive option. For a Conservative Government, committed to free market principles, the resultant sellers market should have been no surprise. Having observed their predecessors mistakes it might have been thought that New Labour would have been more wary of dangling carrots. But rather than scrapping “tax incentives [that] tend to be driven by the vocal middle classes. [And] are a good example of middle class welfare” (Littlewoood 1998:63) by 2002 Labour boasted that it had provided subsidies of between £13bn and £19bn (DWP 2002 :40). As a consequence people in the 20% tax band who feel they cannot afford to take out a private pension are subsidizing all those who are members, with of course those in the 40% tax band being the main beneficiaries. More significantly the subsidy for poorer workers simply makes the poorer product offered to them cheaper. It does nothing to improve the product. As the evidence regarding Stakeholder schemes suggests private pension saving for the poorest 20-30% of the paid labour force is unlikely to raise their future pension much above current means tested benefit levels (PRG 2001, Field 2002). In the early to mid 1990s when it became apparent that this initial stimulus to the private market had been a costly fiasco there was a considerable consumer backlash. Labour was to the fore in playing advocate to the aggrieved private pension purchasers but it now seems determined to pursue a similar strategy and oblivious to the potential pitfalls. If cheap pension products are purchased, if the strategy of selling poor pension products at a discount succeeds then “the Government would be heading for the mother of all mis-selling scandals” (Warner 2002:1, in Ginn 2003:35).
Importantly legislators also often promote uncertainty and undermine confidence about the future, a necessary requirement if individuals are to invest in products that may not be delivered for thirty to forty years. Indeed, one of the major obstacles confronting anyone trying to be a reflexive lifestyle planner is the fact that
Government's have added to the uncertainty that many people feel as they approach retirement. Changes to benefit rules, new types of benefits for specific groups, restrictions on early retirement, scrapping “the idea of a normal retirement age”

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(Inland Revenue 2002), trimming entitlements that were 'earned' through insurance contributions and tinkering with the tax liabilities of pensioners have generated uncertainty, fear and insecurity. Trying to plan for retirement has become increasingly complex and not surprisingly only a minority in the UK feel able to do so with confidence (Boaz, et al 1999:17). Often it seems that the rules change to suit whatever the economic situation demands, particularly the demand for labour and the level of unemployment. Even planning when to retire is fraught with uncertainty and the constant moving of the goal-posts is not peculiar to the UK (Guillemard and
Gunsteren 1991). Individuals must try to anticipate legislation that has not been framed, rule changes that have not been considered, and stock market behaviour, and over many years into the future. Good luck, rather than prudent planning, is what the individual needs. This, in turn, will create situations where people with similar work histories and expectations, and of similar ages, will find they have very different retirement incomes. The prospect of disillusioned savers and lifestyle managers – the new deserving – passively accepting their fate is less likely if they have previously been politically “activated” by Government.
Providers.
Aware of this danger the Government is pursuing, the rather modest objective of “a more fail-safe system” (DWP 2004:1). This has witnessed legislation and regulation designed to make the private and occupational pension providers more accountable.
But ensuring providers will deliver on their “pensions promise” (Goode 1993) is easier said than done. The Minimum Funding Requirements (MFR) imposed on employer occupational (DB) schemes has been a major factor in the closure of these and the drift to the less risky, for employers, option of DC schemes (Pickering 2002).
The scheme specific funding requirement, intended to replace MFR (DWP 2003), gives trustees new powers that are predicted to “fundamentally change the dynamics of the negotiations between employers and trustees” (
Pensions World 2003,
December;41). Likewise the pension protection fund (PPF), again based on a US model, imposes a levy on all DB schemes to cover funding deficits and liabilities of companies that fail to deliver on their promises. The effect is to get the prudent provider to underwrite the imprudent. Unsurprisingly the PPF proposals have prompted criticism from within the pensions industry and it is plain to some that responsibility ought to be accepted by the state, not the industry.
“In the absence of a government guarantee, a PPF will be nothing more than a big multi-employer DB scheme. The funding/volatility scrum described above will still exist. The only change will be it will have moved across to a much larger playing field. The government is avoiding some fundamental questions regarding the nature of society and the role of the state in welfare provision”. (
Pensions World , Feb 2004, p22).
The Government is not only imposing new requirements on pension providers it clearly reinforces their intention to shift responsibility on to the market. Informed choice (DWP 2004) requires the fuel of information and it is the pension providers who must collate and present the personalised statements and then explain the implications. But market providers are expressing reservations about their role and in this context it is worth noting that welfare professionals, managers and experts charged with delivering the different components of the social division of welfare
(Titmuss 1958) will have particular perspectives on the tasks they are asked to perform. Their interests and approach cannot be simply read off from their structural location as market providers. They may be constrained by the boundaries of the discursive frame that surrounds them and they may play a vital part in sustaining a

11 particular power, knowledge discourse (Mann 2001). However, this overlooks the structural tensions that occur in their specific working environment that may promote contrary perspectives on their part (e.g.; constant changes in technology and working practices), and how specific experts see themselves vis a vis their clients, consumers and customers.
Furthermore pension fund management is seen to have been politicised since Labour came to power by; the requirement for statements on ethical investments, equity issues in respect of annuities including, for example, equalised annuities, “impaired life” and “postcode” annuities 7
and annuity choice (EOC 2002, Pensions World Feb
2004:46). Technological and scientific developments, for example; portfolio management techniques and new administration systems, new computer software
( Pensions World March 2004, p20-2), and new risk assessment possibilities; for example; genetic testing and increasing use of work based drug testing, all add to the pressures that many providers appear to be experiencing. “Pensions admin staff are busier than they have been in 25 years.” (
Pensions World Feb 2004:33).
Thus numerous contributions to the fund managers journal Pensions World have called for radical reforms and improvements to the state pension. Rather than replacing state welfare it is clear that many providers see occupational pensions
(mainly DB schemes) as second tier, top up benefits. Private/personal pension (DC) providers too have been quick to distance themselves from the idea that they can cater for all. It is important to acknowledge that at least some providers of occupational and private/personal pensions might be both “In and against the market”, to paraphrase an older organising slogan (LEWRG 1980). As Hunter points out a more sophisticated and nuanced understanding of the social identities of welfare professionals is needed if we are to recognise the potential for common ground between users and providers (2003:337).
Clearly some pension providers are not overly keen on being the cornerstone of government policy and are already expressing reservations about their ability to manage aggrieved consumers. More information leading to better educated consumers may indeed activate some but this may fuel complaints and generate further resentment from providers. With a 70% increase in the number of complaints to the office of the Pensions Ombudsman in 2003 the formerly closed world of the pensions expert is being opened up to scrutiny. And not everyone appreciates these activated consumer-citizens.
“But now the culture of complaint has reached disproportionate levels… […] the current consumerist faux outrage in the Equitable affair seems to have reached unreasonable heights, with emotions reaching lynch levels”. (
Pensions World January
2003:39). The point was made again in 2004:
“…, the question arises whether we have an excess of route to complain.” […] “The remedies now available are legion, there are two cracks at the internal dispute resolution (IDR), a trip to OPAS, a chat with the Pensions Ombudsman and then, if there are the funds and the desire, discussions with county courts, high courts, and so on up to the loftiness of the European Courts of Justice and Human Rights”.[…]”..
OPAs is understandably succumbing to the temptation to grandstand and express its views on what is wrong with the Pensions World. It may be that with the views of the
Pensions Ombudsman, of OPAS and of many observers, we could do with a reduction in suggestions for simple solutions. …[…..] It is possible that we have a complaint system too far.”.(
Pensions World March 2004, p40-41.
Activated consumers.

12
Legislators may seek to pass the buck to providers but they may be unwilling or unable to accept it. Employers with DB schemes clearly want to pass responsibility on to individual employees (via DC schemes). As a stunningly frank Leader article in
The Economist (May 10th 2003:9) explains.
“The buck stops here. Judging the right provision for old age is surely the individual’s job, not the bosses. […]. Providing for old age will always be risky. The risk may fall on a government which may renege on its predecessors’ promises, or on a company that may welch on its contributions, or on a money-manager who may deliver rotten returns. Increasingly, individuals will have to decide how to invest their savings. It won’t be easy, but then it never really was”.
However, retirees have shown that they are quite adept at using their “deserving” status to mobilise public opinion. For example, pensioner groups in 2003 -2004 were very vocal in their complaints about local authority rate rises that were three to four times the rate of inflation. Such increases are acknowledged to negatively affect people on fixed incomes, most notably retirees. Central government responded quickly in February 2004 by threatening to cap errant local authorities. Indeed, the problem for a government committed to transforming its people into active lifestyle managers may be that they are already active (Vincent 1999). They may be all too aware of the pitfalls of the market, the fickleness of government policy and the unpredictable results of fund managers. Activated consumers may, therefore become the problem not the solution.
Again the Equitable life fiasco, which saw the company offering savers a Guaranteed
Annuity Rate that it was subsequently forced to withdraw, provides a clear example of two key points that may militate against a policy premised on activation.. First there will be many reflexive individuals who will have noted that one of the largest and oldest companies simply could not guarantee anything. Second, the response of policyholders who lost money was to form the Equitable Members Action Group
(EMAG). After prolonged court action against Equitable Life and a campaign for compensation estimated at £3 billion, EMAG is now pursuing the government on the grounds that the regulatory systems it established were inadequate. With MPs apparently “inundated with complaints from constituents over their losses”, petitions, resolutions and protests at the society’s annual general meeting (May 19 th
2004), and threats to take the case to the European courts, EMAG has refused to passively accept that no-one is responsible for their losses. Faced by such a massive compensation claim the government deny that the Penrose report (2004) into the failure points the finger at them. Simultaneously; “Life insurers fear the Government is willing to see
Equitable become insolvent, leaving the industry to pick up the bill through the
Financial Services Compensation Scheme “(
The Observer Business , 21.03.2004).
Perhaps this is not quite the sort of activation, by educated and informed consumers that the Secretary of State for Work and Pensions had envisaged but it highlights the sort of tensions that can develop between, consumers, private pension providers and
Government.
As Giddens who has been so keen to activate consumers noted in respect of the basic state pension. “Once established, benefits have their own autonomy,[ ] expectations become 'locked in' and interest groups entrenched. We should have our pensions because we are 'old' (at age 60 or 65), we have paid our dues (even if they don't cover the costs), other people before have had them, everyone looks forward to retirement and so forth (1998:115-116).” And if this applies to public welfare, which supposedly promotes passive dependency, it is more likely that those who have saved in occupational and private pensions schemes will feel aggrieved. Activated

13 consumer citizens are more likely to seek redress, or at least blame someone, if having conformed to the requirements of the new deserving, they are subsequently informed that their fund underperformed, or that their earlier expectations were unrealistic and need to be lowered.
As the Commons debate on the Penrose Report (2004) made plain there is widespread concern that mistrust in the pension providers, of the regulatory framework and of successive Governments, undermines the active lifestyle manager ( Hansard 24 th
March columns 976-1025). Protests in May 2004 by former employees of United
Engineering Forgings (UEF) who lost the majority of their pensions savings when the company collapsed, were directed at the Prudential insurance company, whose subsidiary (PPMV) was the major shareholder in UEF. The Prudential board were heckled and greeted by placards demanding that they “Give us back our pensions”. In response the chief executive told shareholders that Prudential had neither a legal nor a moral obligation to compensate for the losses ( The Independent 7.05.2004) . With 298
MPs signing an Early Day Motion in the first week of May 2004 on pension compensation it appears that at least some legislators accept they have a responsibility for those who have lost pension savings through no fault of their own. One week later
(14 th
May 2004) the Government announced that it was setting up a £400m compensation scheme that would apply retrospectively to occupational pension scheme members who had lost out due to their employer going out of business
8
. This major U turn reflects the argument made here that despite the attempts at shifting responsibility Government will feel the need to step in to ensure that the new deserving are not seen to be disadvantaged by the failure of markets or private providers
9
.
Conclusion
As Orwell noted “Political language is designed to make lies sound truthful and murder respectable”. (1946;170). It is very tempting to see Labour’s language in respect of retirement and pensions as simply ideological (Taylor-Gooby 2001:210). A gross distortion of reality that is intended to promote the finance markets during: “The cold war in welfare” (Minns 2001, Blackburn 2002). Choice, flexibility and simplicity, are the velvet glove puppets but compulsion and regulation the claws they conceal. Or it could be that New Labour is merely mouthing “a set of slogans tailored to the needs of the age” (Cammack, 2004:165). They may genuinely believe that they can activate the inert consumer citizen, and that once activated responsibility will shift from government to the providers of second tier pensions. Thus their political language is designed to promote behaviours that correspond with the choreographers’
(policy makers) demands.
Education, information and activation, are the three “steps” that are proposed to enable everyone to make the right choices as far as the present government are concerned. The mechanisms that will translate these steps into daily life range from the school curriculum to tax incentives. It is far from clear, however, that everyone is willing, or able, to dance to the DWP tune. But once activated the consumer citizens and those required to cater for them – the providers – may, like the finance markets they rely upon, perform in unanticipated and unpredictable ways. Establishing mechanisms of redress, compensation and accountability has already generated considerable political heat. Each of the players is looking to the others and trying to shift responsibility and there is a danger that the expectations of the consumer citizen will not be realised. Disappointing those who saved and planned – the new deserving
– could be a very risky strategy, for both Government and the pensions industry.

14
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1 I am grateful for the constructive comments of; the JSP referees, participants in seminars at CASR,
RMIT University, and at Dept of Social Policy & Sociology Sydney University and Sociology at
Queensland University, 2003, at the SPA conference in Nottingham 2004, from John Clarke and colleagues at Leeds, Simon Prideaux and Pete Dwyer.
2 See any UK newspaper or broadcast media for 10 th -13 th October 2004, BBC Radio 5 devoted virtually the whole of 12.10.2004 to discussing “the pensions crisis”.
3 Defined contribution schemes are usually funded by employee contributions although employers may make contributions as well. The funds are invested in the finance markets to generate –hopefully- additional, savings.
4 401(k) schemes are named after the tax privileged code that is used in the US. They are Defined
Contribution (DC) schemes .
5 They may subsequently be delighted that they did not have to make a decision of course, and the technique may be entirely appropriate. The point is that the rhetoric of choice is underpinned by the governments assumption that pension funds will outperform other means of saving; e.g.; property. And that the “right choice” must therefore be privileged and promoted.
6 The Maxwell scandal witnessed the Mirror Group Newspapers pension being fraudulently used to support failing companies also owned by Robert Maxwell, the AWS (Allied Wire and Steel) company pension was “lost” when creditors claims were privileged over prospective pensioners’, and the misselling scandal saw millions of people being sold inappropriate pension products, that had been underpinned by
£ 6bn tax subsidies. Compensation and the Government’s role in ensuring this has been a recurring theme in each event.
7 Postcode annuities are designed to provide higher returns for people who can be expected, on the basis of where they live, to die sooner, or later, than the norm. Geographical and social class differences in mortality rates would therefore be recognised to a degree.
8 Although at the time of writing (October 2004) it was unclear where this money would come from, with the government apparently expecting existing pension fund providers to contribute.
9 There are also remarkable parallels with events a century ago when the deserving, defined as those who had saved with Friendly Societies, were compelled to seek support from the Poor Law. The 1908
Old Age Pension Act was intended to ensure that respectable savers (and newly enfranchised voters) were not conflated with “the roughs” (Mann 1992:54-57). “New” Labour’s desire to break with tradition ensures that it seems oblivious to historical events that played a part in the Party’s formation, and initial appeal.