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Call for pension freedoms to be reversed

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The pension freedoms reforms should be reversed to make sure part of the pension pot is used to provide a steady stream of income, according to research.

The Melbourne Mercer Global Pension Index ranks the pension systems of 25 countries. In its latest report Denmark and the Netherlands came first, followed by Australia.

The UK was in the third bracket, with researchers saying the UK has a sound structure but some areas for improvement. Other countries in this tier include Sweden, Canada and Chile.

But the researchers also noted the UK’s pension system could be improved by “restoring the requirement to take part of retirement savings as an income stream”.

Other recommendations include boosting the minimum pension for low-income pensioners, increasing the coverage and level of contributions of workplace schemes, boosting household saving and encouraging older people to work.

Mercer senior associate Glyn Bradley told the Daily Telegraph: “The UK’s new pensions freedoms are a welcome once-in-a-lifetime change but they pose difficult challenges in ensuring that tax-privileged saving is used to provide an adequate income in the final years of life, and not exhausted in middle age. Annuities might be part of the answer.”

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Guide: how to… communicate with your pension members

Effective communication of your pension scheme is a large part of getting auto-enrolment right. Delivering the same message to all employees is not necessarily the way to go. To assist you with the communication of your pension scheme, we have provided some key areas to think about, such as:

  • What to consider when segmenting your workforce
  • How to communicate to pension scheme members at the right time in their member lifecycle
  • What topics you should be discussing with your pension members
  • The new pension freedoms and the importance of communicating them

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. What took them so long? The whole point of pensions has been demeaned with these so called Freedoms. At root just a clever political ploy to boost the tax take.

  2. As stated before April 2015, all Govt ever had to do was adjust the minimum income requirement for Flexible Drawdown. All this flexi-access effort, and the fall-out for annuity providers, was totally unnecessary and apparently counterproductive.

  3. Were the government to cancel these new unfettered access provisions it would have to admit that they’ve been a mistake (which I think they are) and that would incur massive political damage. It’s hard to see how that’s likely to happen.

  4. Looking at the above 3 comments I say – keep IFAs away from this. They are not fit for purpose!

  5. Andy Robertson-Fox 21st October 2015 at 11:18 am

    I made a postıng earlıer but it seems to have got lost ın the ether! I suggested that one pension Freedom – or lack of – that could be reversed is the abolition of the Frozen State Retirement Pension policy and, perhaps the Global Index the organisers should reflect the implications of it as it affects not just the UK pensioner but also the economies of such countries as Australia and Canada as it is theır taxpayers who subsidise the UK government by paying poverty-line UK pensıoners living in those countries and who are denied index linking …about a £100 million a year subsidy in the case of Australia

  6. Personally I like the new freedoms, it offers my clients a new perspective and alternates, and I have not had one client be insistent or do anything silly…. the reason ! … they take advice !

    Now this falls down when good people fall for scams and greed ! some realize quite quickly, but some may never find out for some time, and that is the big fat white elephant in the room

    Just think of the rush for access if they reverse the rules ! crikey there would be a free for all.

  7. I would call for solid education about managing decumulation, using intelligent platforms to help manage it successfully, and not one penny of my SIPP will ever go near an annuity provider.

  8. The Minimum Income Guarantee should NEVER have been abandoned. Nothing but a cheap Treasury stunt to garner accelerated income tax – and to hell with the retirees who will suffer for their own folly.
    This was Point #4 in my ‘Pensions Manifesto – A vote for common sense’ (totally ignored, I might add, by Ms R Altman)

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