The Government will not pursue radical reform of the pension and Isa regimes until 2017 at the earliest, Money Marketing understands.
Last July, Money Marketing revealed Treasury officials had opened discussions with the industry on the practicalities of linking Isas and pensions. This followed the Government’s decision not to press ahead with plans to allow people to access a portion of their pension before reaching retirement age.
It is understood that plans for radical reform have been shelved until after the automatic enrolment review in 2017.
Treasury sources say the Government remains open to ideas on “non-radical” reforms which could help the Isa and pension regimes work more effectively together but no workable ideas have so far been submitted.
One says: “While the industry has repeatedly called for a merger of pensions and Isas to be explored in more detail, no proposals that would actually work in the real world have been received.”
Institute of Directors senior pensions policy adviser Malcolm Small says: “The upsurge in demand for Isas, in contrast to the fall in pension saving, indicates that people want more flexibility. My concern is if the Government does not pursue radical reform in this area, then pensions as an architecture will wither on the vine.”
The Treasury declined to comment on the issue.