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Labour prepares assault on Osborne’s Budget annuities reforms

Shadow financial secretary Cathy Jamieson says Government has produced a “worrying” lack of evidence to support reforms

Labour has tabled an amendment to the Finance Bill that would force the Treasury to publish analysis carried out before Chancellor George Osborne announced his Budget
annuities overhaul.

The reforms, which come into effect from April 2015, will allow anyone aged 55 or over to take their entire pension pot as cash, with savers taxed at their marginal rate.

Speaking to Money Marketing, shadow financial secretary Cathy Jamieson says: “The lack of detailed evidence from the Government is extremely worrying.

“Our amendment asks the Government to publish their initial impact analysis.

“Free and impartial face-to-face guidance is what has been promised, but we still do not know what form this will take or the exact cost. More worryingly, the Government says the guidance will be provided by the pensions industry, so there is a real danger that the costs will be passed on to consumers.”

Jamieson also warns the majority of people will not be able to afford to pay for regulated financial advice.

She says: “The Government has also said it expects guidance be a stepping stone to advice; but advice, whilst it provides much greater protection, is also much more expensive, and will be more than many savers can afford.

“We need assurances from the Government that people will get the help they need to make the right decisions about their futures.”

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