Pensions have never been more attractive. The coalition Government has done a good job in doing away with the idea that pensions are something to be kept under lock and key for the longest possible period, before converting them to a typically paltry income. Now pension freedoms are upon us, savers are free to do what they want with their money, a stance very difficult to challenge politically.
On top of that, the new “death tax” reforms are now in force, with unused pension pots left by those who die aged under 75 tax-free. The same goes for joint-life annuities.
All of the above means engagement with pensions is likely to be higher than it has been for years. In the first weeks of pension freedoms, anecdotally advisers are reporting that rather than cash in their pension pot completely, investors are piling into pensions like never before.
But we could be reaching a tipping point on bigger and better contributions, and that is down to the same group of people that whipped up interest in pensions saving in the first place – politicians.
The issue of reforming pensions tax relief has been bubbling away for years. But now the Tories have announced their headline grabbing inheritance tax move, pensions tax relief is most definitely boiling over.
Of course, as the campaign for Number 10 gathers pace, candidates only have to open their mouth to wax lyrical about their latest policy for journalists and rivals to jump down their throat about how these fanciful ideas will be paid for.
So the Conservatives have come prepared, saying the increased £1m IHT threshold would be funded by reducing the annual allowance for higher earners.
And the Tories aren’t the only ones at it, as Labour and the Liberal Democrats have also signalled plans to overhaul tax relief.
As election pledges are fleshed out, it could be that the noise around tax relief is actually pushing savers to contribute more to their pension while they still can.
Policy wonks may be looking to dissuade the public of the notion that the hallowed “grey vote” is protected in the run-up to the election. They will bang the drum about looking after “hard working families”, but don’t diligent savers also count as hard working?
The question policy teams should be answering is: do we want to encourage pension saving or not?
Natalie Holt is editor of Money Marketing – follow her on Twitter here