Pensions - Articles - A J Bell calls for a pension moratorium

 Platform provider A J Bell today welcomed the Chancellor's Budget confirmation that pension tax reliefs would not be subject to significant reform.

 In his latest Budget the Chancellor confirmed the tightening of rules on transfers to Qualifying Recognised Overseas Pension Schemes and the closure of a mechanism which allowed for significant contributions to be paid by employers to the spouse or family members of their high earnings employees.

 The key tax reliefs offered to pension savers were largely left untouched.

 A J Bell Marketing Director Billy Mackay said, "There has been a great deal of speculation in recent weeks regarding the possibility of restrictions in higher rate tax relief, tax free cash or the annual allowance. This sort of speculation damages confidence in pensions and causes abnormal behaviour in pension savers. We have seen significant increases in both individuals making contributions to their pension and choosing to take their tax free cash lump sum because of the fear of these restrictions. This type of saving behaviour, driven by a fear of change, costs the Government money because of the additional tax relief it has to pay on the pension contributions.

 Mackay continued, "If the Government wants to restore confidence in pensions and discourage any unnatural behaviour it would be advised to announce a moratorium on changes to the key pension rules on tax reliefs and benefits. Whilst we did not get that assurance in the Budget, we did receive the next best option, short term stability."