In view of the Government's 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
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
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's 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's
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's 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' money on people like
Pickering, Sandler, Myners and all the rest of them.
WDS Independent Financial Advisers,