Steve Bee: The damage to our pensions system is already done

steve bee

I have no idea what is going to happen to our pensions system in next week’s Budget but like everybody else I have read about the rumours. Pension tax relief reform might have been put on the back burner but speculation remains as to whether the Chancellor has any more rabbits in his hat.

Saying that, it really does not matter what changes are wrought on Wednesday. I fear the damage to our pension system is already done. That happened long ago when the pension freedoms were announced. At that time there was something of a media frenzy; the issue dominated the papers and airwaves. A real revolution had happened in the erstwhile sedate world of pensions. An overnight coup.

I was as pleased as anybody that the annuitisation rules had been scrapped. Indeed, I had been calling for such a change for almost a decade. But I was shocked at the way it happened: a few unexpected words in a Budget speech and the certainties of pensions were changed forever.

The way such huge changes were introduced made me realise just how frighteningly fragile our pensions system was. I could not get that out of my head.

When I finally came around to being able to write about the freedoms, I highlighted my fears for the future. A future we are currently experiencing. A future where fundamental changes to our pensions system could be made at the drop of a hat. A future where no one would ever know for sure just what the rules and regulations would be in a few months time, let alone decades hence when lifelong savings plans come to fruition.

Maybe more changes will happen this year; maybe they will not. But, as I said, I do not think it matters now. Everybody knows our pension system is not stable any more.

Steve Bee is director at Jargonfree Benefits