In an interview with Money Marketing at the Conservative conference in Manchester, Shadow pensions minister Nigel Waterson revealed the Tories are furious they were not consulted on changes to auto-enrolment timeframes. He says: ” I think that does cast a real shadow over the whole project.”
Plans for a lifetime savings account were included in the last Tory manifesto in 2005. Industry experts believe the auto-enrolment delay has focused Tory minds on radical changes to the scheme. Proposals may include the promotion of workplace Isas.
Waterson says: “We are looking at all sorts of flexibilities. I think we might get away from the notion of pensions and look at lifetime savings. We have not got a developed policy yet. All I can say is that we are certainly looking at the KiwiSaver model quite closely.”
Under New Zealand’s KiwiSaver, people can access their pension savings to buy a first home, fund healthcare if they become seriously ill, deal with financial hardship or if they are moving overseas.
Cicero Consulting director Iain Anderson says: “The Conservatives are certainly angered by the Government’s recent moves on personal accounts and are looking at plan B actively now. This includes promoting the Isa as the main vehicle for lower-income-earners as part of likely lifetime savings proposals.”
On Tuesday, Shadow Chancellor George Osborne said the Tories would “reverse the eff- ects of Gordon Brown’s pension tax raid” over the long term. This would be unlikely to mean a straight reinstatement of tax credits on pension fund dividends, according to Watson Wyatt.