David Fairs added:
“The pensions industry is currently facing its biggest challenges as it tries to cope with the extension of auto enrolment into smaller firms – some 40,000 employers per month will have to stage as we move into 2016/17 – this is an enormous policy challenge and has to sit comfortably with the Government’s commitment to deregulate. At the same time the Government is likely to try to change the rules around tax relief with yet another additional layer of complexity if the Government follows through the Conservative manifesto on 8 July, as well as the disruption caused by the “Freedom and Choice” initiative announced in the 2014 budget. It is also rumoured that salary sacrifice schemes may be ended. Again, this would be hugely disruptive and undoubtedly would adversely affect pension saving by many lower and mid-level earners – quite the wrong policy outcome when the Government needs to encourage higher levels of pension saving.
“All of this reinforces the ACA’s call – first made in 2010 – for an Independent Retirement Savings Commission to look at all these issues in the round and to provide balanced recommendations to Government including recommendations in changes to retirement age and addressing issues such as over-regulation, a stable and sustainable pension tax package and a proper evaluation of ‘fair’ pension charges for the future that both consumers and providers find acceptable and sustainable.
“On the one hand, new and complex procedures to ensure that the public is protected are being rushed in but on the other hand Government is criticising the speed at which the industry is embracing fundamental disruptions to its operating model which is a ‘bit rich’. Whilst the ACA supports the Freedom and Choice agenda and believes it important that the public gets support in understanding the important choices that individuals are faced with at retirement, the Government is in danger of tackling these issues in a disjointed and piecemeal basis. Too often pensions have suffered from unintended consequences.
“An Independent Commission would help support joined up decision making and we hope the new Pensions Minister, Baroness Altmann, and the new Economic Secretary, Harriett Baldwin MP, might persuade their colleagues that such a step would improve the long term success of these fundamental pension reforms.”
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