The ongoing fight for pension freedom clarity


Spot the difference between these two questions:

  1. How many people have withdrawn more than the 25 per cent tax-free allowance from their pension fund as a lump sum since 2014?
  2. How many people have withdrawn lumps sums of more than 25 per cent from their pension savings since the freedoms were introduced in April 2015?

Now, I’m minded to think that both are asking essentially the same thing. Yes, the first is asking about money taken since 2014, but seeing as the freedoms weren’t launched until 2015 (and before then lump sum withdrawals were hit with an enormous tax charge), I’d argue the two questions should probably get roughly the same answer.

Apparently, I’m wrong.

Because the first question was asked of the Treasury by Conservative MP Dr Andrew Murrison in early March, and he was told by financial secretary David Gauke: “HM Revenue and Customs does not have information on all types of taxable pension payments taken since 2014.”

That seems fairly straightforward.

But by a happy coincidence, I filed a Freedom of Information request with HMRC around the same time, asking the second question.

And the response I got was slightly different.

“I can confirm that HMRC holds information that falls within scope of your request. However, we estimate that it would exceed the FOIA cost limit to deal with it,” the taxman said.

So HMRC either does, or does not have this information, depending on who you ask. What exactly is going on here?

Well, the Treasury told me this week the two answers were not contradictory, because Dr Murrison asked for data from 2014, and apparently HMRC doesn’t have that information.

However, I was told, HMRC does have information from 2015 – but that information genuinely would be too costly to extract.

In the meantime, Dr Murrison tells me he will be writing to Gauke to ask for an explanation of his own.

Faced with all of this, it’s difficult not to respond with a resigned sigh, because it’s not the first time we’ve faced an uphill battle figuring out what is going on with the freedoms.

In fact, when they first launched almost exactly a year ago, it was already clear that getting information on how the new options were being accessed might be a challenge.

In February 2015, the Treasury rejected a Money Marketing freedom of information request on its forecast for take up of Pension Wise.

A few months after launch, it rejected another request, this time enquiring into satisfaction levels with the performance of the guidance service.

We’ve reported on this determined opacity, over and over again.

And it had seemed like things were changing, not least because there are now regular monthly updates published on how Pension Wise is performing.

But here we are again. And it almost doesn’t matter what the answer to both mine and Dr Murrison’s questions are.

The Treasury says HMRC doesn’t have the data. HMRC says it does but you can’t have it.

And we’re stuck debating whether the Government is being transparent enough, rather than looking at the real issue of how the freedoms are actually performing.

Mark Sands is politics reporter at Money Marketing