Labour shadow pensions minister Nick Thomas-Symonds says he has “serious concerns” the Government could be planning to cut upfront tax relief in a “short-term dash for cash”.
Speaking to Money Marketing, Thomas-Symonds hit out at one of the proposals set out by the Chancellor. He also criticised pensions minister Ros Altmann’s attack on the industry over Pension Wise.
He says: “I want to see something sustainable for the future. I don’t want to see a short-term dash for cash as opposed to something that stands the test of time. I am worried about that point. If we are to go to taxing contributions on the way in it seems to me quite obvious that could be a way of raising cash now.”
Labour is yet to comment on its favoured model of tax relief and the shadow pensions minister is also reluctant to reveal the party’s hand.
He says: “The current system has much to recommend it but I am not opposed to change. I will look very closely at what’s said and if it encourages long-term stability. If Osborne is just looking to raise money quickly and will do that by making dramatic changes, then obviously I’d have serious concerns about that.”
Thomas-Symonds also criticises the Government for blaming the industry for the low take-up of the Pension Wise guidance service. Earlier this month Ros Altmann told Money Marketing she was “concerned the providers are driving too many people to their own in-house services”.
Thomas-Symonds says: “I hope the Work and Pensions committee report will cause the Government to look at Pension Wise and reassess. I don’t think the Government should be asking for more money for the service. It should be more effective with what it already has.
“Signposting is the big thing, from both providers and the Government. There’s not a big financial commitment to that. And I don’t think it’s just the fault of providers. The Government has to take responsibility.”
However, despite not wanting extra funding for the service – which will run to £39.1m this year – he does agree with the Work and Pensions committee that sessions should be broader in scope.
He says: “The other issue is Pension Wise has been too narrow, pensions is only one aspect of retirement. We need to look at care and health needs as well as property.”
While the Ed Miliband administration was known to be working on proposals that could have reversed some aspects of the freedoms, Thomas-Symonds gives his backing to the reforms.
“I have no issue with the principles of the pension freedoms but the Government must make sure people make informed decisions.”