Leaks ahead of this month’s comprehensive spending review suggest that Nest is likely to be saved from the chop. We will, however, have to wait until October 20 to be sure as the scheme has to satisfy both the policy scrutiny of the current Nest review and the financial scrutiny of a Treasury desperate to make swingeing cuts.
With no alternative in sight, let’s hope that Nest is retained. Pensions minister Steve Webb is making all the right noises about laying the foundations for a higher and simpler state pension which is needed to ensure the scheme is not undermined by the possible future interaction with state benefits.
Economic realities mean a citizens pension will not be created overnight but a clear roadmap from the Government to create a higher basic state pension and possibly clearing up some of the complexities around the second state pension will be a real positive step.
This month, Retirement Strategy hears from Association of Consulting Actuaries chairman Stuart Southall, who is continuing his battle to get the Government to do more to encourage the creation of occupational risk-sharing schemes.
Southall warns that while Nest will benefit the millions without any pension provision, a middle way is needed to combat employer levelling down.
The Conservative Party was very interested in the idea of promoting hybrid schemes as a middle ground between DB and DC in the run-up to the general election. The issue seems to have fallen down the agenda of the coalition Government, perhaps not surprising given the huge number of pensions announcements and consultations it put out before the summer recess.
Elsewhere in the issue, The Retirement Partnership managing director Steve Lewis makes an interesting discovery about postcode annuities, with addresses situated round the corner generating different quotes. Responding to the Government’s current annuities consultation, LV=’s Ray Chin warns that arbitrary and inflexible limits to the use of flexible drawdown must be avoided. In our head to head, Sun Life of Canada’s Mark Stopard and Scottish Widow’s Ian Naismith debate the extent to which tax relief works as an incentive to save in a pension as the Government deliberates over the annual allowance.
The Money Marketing awards is looking for submissions for the 2011 awards for the best retirement planner and the new category of best annuity planner. Anyone interested in entering should got to www.moneymarketingawards.co.uk for more details.
Paul McMillan, Editor, Retirement Strategy