Last week’s Budget confirmed the Government will push ahead with its plans to restrict higher-rate tax relief on pensions. Rarely has the industry been so united in its opposition to a pension policy with providers, advisers the National Association of Pension Funds and Tisa among those queuing up to attack the plans and offer alternatives that would generate similar revenues.
A consensus seemed to have developed around reducing the annual allowance as a fairer way of collecting extra revenue if the Government had its heart set on targeting higher-rate relief. In the end, Alistair Darling was not for turning despite the huge lobbying campaign.
Some might say it was fitting that in what may well be this administration’s final Budget, it passed through another kick in the teeth to the pensions industry after beginning in 1997 with its infamous raid on pension funds. So, what would the Tories do? This month, Retirement Strategy caught up with Conservative Shadow pension minister Nigel Waterson ahead of the general election to hear his plans for reform should the Tories get elected.
He describes the new restrictions on pension tax relief as a “very bad idea” although he is careful not to commit to any reversal, suggesting it is a matter for the Tory Treasury team.Waterson does however lay out the pension priorities for an incoming Conservative Government, including a review of Nest, scrapping forced annuitisation and reform of public sector pensions.
How brave the Conservatives will be on public sector pensions, if elected, is likely to depend on the size of their majority and it is unlikely we will see much detail of possible reforms this side of the election.
Elsewhere in Retirement Strategy, Retirement Plus chief executive Duncan Young tries to put on a brave face and be optimistic about the year ahead for equity release. Retirement Plus is one of the large number of providers who have suspended new lending due to funding difficulties but Young explains why he believes things may be set to change, slowly.
In the aftermath of last December’s RDR consultation paper, Friends Provident director of UK corporate James Ward and Corporate Adviser editor John Greenwood go head to head on the extent to which commission damages the group pension market.
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