Conservatives warn that the pension term assurance U-turn will lead the public to fur- ther question whether it is worth saving and investing within a tax regime that is so unstable.
Speaking at the ABI Better Regulation conference, sha-dow Treasury financial secretary Mark Hoban said Chancellor Gordon Brown’s volte-face sends a contradictory message at a time when the Government is embarking on a major reform of pensions.
Hoban said the Government was well aware of how PTA would be used and to sudd-enly announce a change in policy so soon after A-Day leads him to question the thought process that the Treasury went through in the first place.
He said: “Did it understand some of the issues around the taxation of pensions?”
Hoban said the PTA saga was not in the interests of consumers, industry or the Government and called on Brown to think carefully about the lessons that can be learnt.
Hoban said: “For most people reading the articles, the headlines will send a message to them as to whether it is worth investing and saving in pensions when the tax regime is so unstable and unpredictable. The message we need to get across is long-term stability, not signals like this that will end up dissuading people from saving for retirement.”