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Leader: Chasing pipe dreams on pensions

It is a sad state of affairs when the thing you want most is the thing you cannot have. What is worse is when your stated aim is considered to be idealistic, nothing more than a pipedream by those in the know.

Before this all gets a bit deep and heavy, I am talking about a long-term vision for pension saving and tax planning in the UK. Many crave it, but no politician seems to have cracked it yet.

In the immediate aftermath of the Budget Philip Hammond’s spreadsheets have taken a battering, so much so that one of precious few standout measures in a quiet Budget has been scrapped.

Earlier this month, Money Marketing questioned the lack of help for long-term saving. I did not realise my words would be thrown back at me at such a rapid rate. Nothing says “long-term” like a U-turn within the space of a week.

The axed plans to increase Class 4 National Insurance contributions for the self-employed threaten the Chancellor’s ability to deliver real reform, at least in the immediate term. If policy is to be successfully shouted down in this way, what is to stop MPs taking the same tack again, for example, on changes to defined benefit pensions?

What it also suggests is the self-employed are another sacred cow which should remain untouched. This does not bode well for any efforts to bring the self-employed into pension saving.

It is argued that to expect anything other than constantly shifting sands on pensions and tax policy is unrealistic, given that governments and chancellors come and go.

But this is about being more than being averse to change. This is about a need for transparency from the Government about the future direction of pensions and investments.

As Royal London policy director and former pensions minister Steve Webb points out, as Isa allowances climb ever higher pension allowances are being curtailed at the same rate.

Webb argues if the Government is driving at making Isas the new pensions, politicians should be upfront about it. Speak now or forever hold your peace.

It is all advisers can do but watch from the sidelines with increasing frustration as sensible policymaking seems to slip further out of reach. Advisers are now resigned to lurching from one Budget to the next, trying to guide clients through the madness as best they can.

Natalie Holt is editor of Money Marketing. Follow her on Twitter: @Natalie_Holt_MM

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