Prudence penalised

GOVERNMENTS would love citizens to build up their own retirement funds so they are less dependent on the state in their old age. Many offer tax incentives for pensions; some have adopted “nudge” policies whereby workers are automatically enrolled in retirement schemes.

The reluctance of workers to save for their old age is usually put down to inertia or impatience—being unable to defer gratification to the distant future. In fact, it may be a rational decision in the face of high charges, confusing products and poor returns.