News that the Treasury is to delay its decision on whether to change pension taxation until spring next year is most welcome, says Lemonade Reward managing partner David Pugh. “But what would be more welcome,” he continues “is a break from this constant cycle of change which leads to confusion and so inertia among business leaders and their staff.
“Observers suggest a delay until the 2016 Budget signals big changes are ahead. In one way this can be perceived as good news as it shows the Chancellor is keen to get as much feedback as possible, ensuring he makes a truly informed decision. Yet it also creates a period of uncertainty and angst for those worried about the prospect of more rules and regulations to get their heads around, increased paperwork and discussions with HR.”
During a recent Parliamentary exchange, George Osborne confirmed he is ‘open to consultation on the pension tax system’, indicating it would be a precursor to a Green Paper.
David concludes: “Since leaving things as they are isn’t an option, I’d like to see consultation on two levels. The Government through its far-reaching discussions needs to ensure that whatever pension changes are made, saving is incentivised for businesses and workers, and on an individual level, I’d like to see greater consultation via financial education in the workplace. This would give people a head start in being able to get to grips with future changes, enabling them to become savvy savers.”