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10 steps to put personal pensions back on the map

In view of the Government&#39s continuing inability/wilful resistance to

take simple, practical measures to make personal pensions more

attractive to the ordinary man in the street (who, as we all know, is

utterly turned off them), here are my 10 suggestions for achieving


•Restore waiver of premium cover as an integrated supplement,

with tax relief on the premiums and a three-month deferred period. (A

pox on you, Jeff Rooker, for

removing this).

•Restore integrated pension term assurance, perhaps with the

requirement only that at least something is being paid in the way of

retirement benefit contributions (to the same plan).

•Remove the annuity trap by allowing people to draw (possibly

variable) income,

including an element of their capital, from a pension bond, perhaps

with a specified income guarantee from a specified age once the

capital value of the bond has been fully depleted.

•Allow unspent funds in retirement to pass to the next

generation, with little or no tax charge (which has surely to be a

good incentive for the next generation to add to their inherited


•Remove the 1 per cent cap so that advisers are once again

fairly incentivised to recommend personal pensions (because, as

everyone except the meddlers know, the vast majority of moderate to

low-net-worth clients will not pay fees).

•Simplify the maximum contributions scale to a uniform 40 per

cent of relevant earnings for all, with one year&#39s carry-forward.

•Scrap all limits on maximum fund size or lifetime input. Limits

and restrictions add complexity where none is required. They are also

negative and offputting.

•Introduce compulsory employer contributions but in such a way

as this does not represent either a huge financial or admin burden on


A good starting point might be 3 per cent of relevant earnings

payable half-yearly in arrears to a pension plan of each employee&#39s

choice if that is what the employee prefers to whatever scheme may be

operated by the employer. The self-employed should also be compelled

to contribute a similar minimum amount.

•Allow spouses to leave their deceased partner&#39s fund invested

to provide a retirement income of their own from the normal minimum

age; with the normal option to get part of the fund as tax-free cash.

•Admit stakeholder has been a huge waste of time, effort and

money, scrap it and stop wasting taxpayers&#39 money on people like

Pickering, Sandler, Myners and all the rest of them.

Thoughts, anybody?

Julian Stevens


WDS Independent Financial Advisers,




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