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Brown’s veto could destroy UK pensions

Altmann says Chancellor’s vendetta is blocking reforms

Independent pension consultant Dr Ros Altmann says Chancellor Gordon Brown’s vendetta with Tony Blair and his lack of focus on private pensions could destroy pensions.

On Channel 4 last Friday, Altmann made a blistering attack on Brown for blocking proposals, backed by Blair, to simplify pension reforms by improving the state pension and scrapping means-testing.

She said: “Part of the problem lies in the rivalry between Blair and Gordon Brown. Although the Prime Minister liked my ideas, I believe Brown blocked them because he did not want to end means-testing.”

Altmann argued that scrapping Brown’s policies on contracting out and higher-rate tax relief could save £20bn a year to raise the basic state pension to £114 a week, removing the need for means-testing.

London School of Economics pension expert Professor Paul Johnson said personal accounts could lead to the collapse of pensions through “levelling down” while Informed Choice managing director Nick Bamford said: “There is a pretty good chance that the Chancellor will be the one responsible for the total destruction of UK pension savings.”

But the DWP says Altmann’s plan for £10bn savings by axing higher-rate tax relief are inaccurate as it accounts for a quarter of the £12bn annual cost of tax relief. A spokes-man says: “Removing higher-rate tax relief would be compli- cated for employers, especially those who run defined-benefit schemes, and could put more pressure on the occupational sector, threatening people’s pensions.”

“The abolition of defined-contribution contracting out does not represent a real saving but merely shifts expenditure from today, when we pay the rebate, to future years when rebate money will be needed to pay the higher state second pension accrued under our reforms.”


IMLA appoints CML chief in director role

The Intermediary Mortgage Lenders’ Association has appointed CML deputy director general Peter Williams as its first-ever executive director. He will take up his duties on October 1, 2006, after leaving the CML at the end of this month to work as a consultant. He will work for IMLA on a part-time basis.IMLA chairman Guy Batchelor […]

Cirencester stays close to its roots in rebranding

Income protection specialist Cirencester Friendly Society is rebranding. The society, originally known as the Cirencester Conservative Association Working Men’s Benefit Society, was founded in 1890 to help safeguard the financial stability of agricultural workers in the Cotswolds. The new logo aims to stay true to this history while presenting a modern face as an income […]

Home and away

Property UK investors are increasingly looking overseas for property investments and the emergence of UK Reits will give them the benefits of a tax-advantaged wrapper and global diversification, says Alliance & Leicester head of intermediary mortgages Mehrdad Yousefi


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