U turn on pension simplification reforms is a shambles

by Dr. Ros Altmann

(All material on this page is subject to copyright and must not be reproduced without the author’s permission.)

---

MUDDLE AND INCOMPETENCE – HOW CAN WE TAKE THIS GOVERNMENT SERIOUSLY ON PENSIONS? 

Can this Government be trusted on pensions?    
The Treasury has been warned of the dangers of its proposed tax ‘simplification’ of pensions for so long and chose to ignore those warnings, yet now, at the last hour, it has suddenly changed its mind and withdrawn its own proposals.  This is absolutely the right decision, from a social perspective, but it is totally wrong to have led the industry and the public to believe that such changes were going to go ahead in the first place.

What about the millions of pounds the industry has spent gearing up for A-day?

This is a shambles.  Not just because it is now withdrawing the right to put residential property, wines and other items into a SIPP, but also because it actually suggested that this could be done in the first place!  The whole A-day project was flawed from the start and certainly never made sense from a social justice perspective.  It was obviously going to waste enormous amounts of taxpayers’ money.   But the Treasury consistently denied that any changes were needed.

Now, faced with the incontrovertible evidence of billions of pounds pouring into SIPPs ahead of A-day and billions more waiting to go in, it has suddenly pulled the rug from under everyone.

Pensions policy is a shambles and this Government could go down in history as the one which destroyed a once-great pensions system and a superb long term retirement savings culture.  With the means testing of almost half pensioners and three quarters in future, savings incentives have been destroyed.  Pensions should be run as a long term policy, but it seems that this administration can’t even steer policy for a few months, never mind for decades.