Spence and Partners' Kevin Burge looks at the changing pensions landscape in the UK and Australia and asks who is right?

Just as the UK is about to embark on the new pensions revolution in allowing individuals to full access to their pension funds, our friends from "down under" are about to go in the opposite direction.

It is ironic that our new proposals are said to be based on the Australian system, just as they appear to be realising that it doesn't work as expected.

The findings of an inquiry have said that the current system does not adequately manage the risk of the money running out before the person does (this is how I interpret the main report!).

In a nutshell, Australians will have to potentially take some of their pension pot in the form of "retirement income" in order to manage the longevity risk. It would therefore appear that the Australian Government believes that individuals cannot be trusted to look after their own money (the complete opposite view of our pension minister).

The question of course is who is right? You could argue that only time will tell, and I believe that to be true - but can the UK Government afford to wait to be proved right or indeed wrong?

I think we are too far down the road now to change, but it is a concern that we could be going down the wrong path. In the world of topsy turvy pensions this is yet another example of two completely different views on how pensions should work. Who knows which way is right, but as I have already said only time will tell.

Written by Kevin Burge, relationship manager, Spence & Partners

Kevin_Burge@spenceandpartners.co.uk