View more on these topics

Lee Robertson: From flexibility to fear on pensions reform

Lee Robertson

It seems like an age since Chancellor George Osborne announced his intentions regarding pension freedoms. News of arguably the most far-reaching and radical reform to the retirement space seen since the introduction of personal pensions blindsided his political opponents. Initially at least it earned him the exact opposite of the poor reputation Gordon Brown received with his tax raid on pension schemes.

The general feeling was that Osborne had listened to what people saving for retirement actually wanted and had delivered some much needed flexibility to those in “middle England” prudent enough to be saving hard. Citizens that were determined not to be a burden on the state were to be rewarded with real flexibility in retirement.

But what a difference a couple of years have made. Indeed, we seem to be rapidly moving from flexibility to fear. Those that have done as their social contract expected and steadily built up pension funds now find themselves in the ludicrous position of being dramatically restricted in terms of how much they can contribute on an annual basis, with some being limited to as little as £10,000 a year. As well as this, they are facing a drastically reduced lifetime allowance, falling in what seems like no time at all from a potential £1.8m to £1m.

So here we are in a ridiculous situation whereby those that have saved hard are being penalised just because they committed to building a comfortable retirement. And advisers? Well, we are now having to talk to clients about how their chosen investment strategies may lead them to breaching this lifetime allowance and being hit with punitive tax rates.

At the same time, we are talking to those who were unable to make decent contributions while they followed their entrepreneurial dreams and built their businesses. Aiming to get to their pensions later once they had profits, they are now unable to get enough in the pot as the annual allowance has become so miserly.

And then even for those not caught out by the reduction to annual or lifetime allowances, the tax relief available is now massively under threat.

While a pension fund of £1m may sound like a lot at first glance it probably actually equates to considerably less than £100 a day in retirement. And this from a Conservative Government that continually claims to be the party of aspiration.

It seems like chancellors of any political persuasion just cannot be trusted to do the right thing with our pensions. The prudent public deserves a whole lot better than this shambles hiding behind a charade of tax relief “fairness”.

There is nothing much fair here at all that I can see. I suspect Osborne may rue the day he started down this path and will end up with a reputation as bad as Gordon Brown.

Lee Robertson is chief executive at Investment Quorum



The People’s Pension offers £49 robo-advice in LV= tie-up

Members of The People’s Pension are to be offered a personalised recommendation for £49 as part of a tie-up with LV=. The automatic enrolment provider has signed a deal with the mutual which will provide 2.3 million scheme members with access to low-cost online advice. Direct customers are normally charged £199 to produce online retirement […]


Openwork left vulnerable as Zurich plots stake sale

Openwork left vulnerable after Zurich reveal plans to sell off stake Advice network Openwork has been left “vulnerable” after Zurich confirmed plans to sell-off its remaining 25 per cent stake in the business, experts say. Openwork is 67.5 per cent owned by member firms and 7.5 per cent by an Openwork employees trust, with the […]


Gregg McClymont: Why are savers reluctant to pay for advice?

I have no idea what financial advice is like in Northern Germany but as the Financial Advice Market Review rumbles towards a close this side of the North Sea, one is increasingly reminded of Lord Palmerston’s famous aphorism: “The Schleswig-Holstein question is so complicated, only three men in Europe have ever understood it. One was Prince […]

Stephanie Flanders 700 x 450

Stephanie Flanders: Brexit fears are exaggerated

The costs and benefits of the UK leaving the European Union are exaggerated, says JP Morgan chief market strategist Stephanie Flanders. In an interview with Money Marketing, Flanders claims that apart from a weaker sterling, short-term worries about the economy and other asset classes are overrated. Flanders says: “Long-term, I suspect the costs and the benefits of […]

Managing customers in drawdown

By Lorna Blyth, Investment Marketing Manager Delivering a decent drawdown review process takes time and resources. This article looks at how you can manage drawdown clients in a more cost-effective way. Most advisers are seeing an increase in drawdown clients following pension freedoms. Often these are clients with lower fund sizes, which means advisers are […]


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. Spot on, Lee. Osborne has continued the attack on pensions with gusto, making Gordon Brown look like an amateur. Conservative……mmm I don’t think so.

  2. Thanks Anthony, a continued assault on the prudent and careful saver just makes no sense at all to any of us. As ever, I appreciate the feedback on the article.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm