Pension Dashboards
“We are pleased to see Guy Opperman’s Pension Schemes Bill return in the post-Election “Groundhog day” Queen’s Speech, confirming critical pensions changes remain a post-Brexit priority. This paves the way for regained momentum on pension dashboards, new protections for members of defined benefit schemes and a new controversial form of ‘Collective Defined Contribution’ pension scheme.
“Pension dashboards are the aspect of greatest and most wide-reaching importance. Millions of individuals have multiple pensions in which they’ve built up benefits over their working lives and dashboards will allow them to see all of their workplace and personal pensions together, online at the touch of a screen. For many their state pension is a significant proportion so it is vital state pensions are also included from as early as possible. Dashboards offer a huge opportunity to help millions of individuals better engage with their retirement planning, understanding if they are on track for the retirement they aspire to, and if not, to take action accordingly.”
Déjà vu announcement of social care reform
“Many will have a feeling of déjà vu with the Queen’s Speech again repeating the Government’s commitment to reforming adult social care in England. Let’s hope this will now lead to concerted cross-party action to ‘get social care done’, addressing the current and growing crisis in social care provision and how it is funded. This issue affects millions of individuals, looking to find and fund appropriate care either for themselves or a family member, to provide dignity in old age.
“The Queen’s Speech repeated the Conservative Manifesto guarantee that no one needing care will have to sell their home to pay for it, and also referred to seeking cross-party consensus. Labour had plans to introduce free personal care and to cap personal contributions at £100,000. A cap is essential if people are to be incentivised to plan ahead without fear that ‘catastrophic’ care costs will wipe out their life savings and inheritance aspirations. The Lib Dems suggested a ring-fenced Health and Care tax, disclosed on payslips. If as is likely taxes do need raised, a combination of wealth and income taxes might tick the intergenerational fairness box.”
Other pressing pension priorities
“There are other pressing pension priorities, some of which were mentioned in the pre-Election Manifesto, which need urgent Government attention and we hope these will feature in the planned February Budget. These include ensuring non-taxpayers in ‘net pay’ schemes receive the 20% tax relief on their pension contributions to which they are entitled. The lowest earners deserve every help they can get to save for their retirement.
“At the other end of the earnings spectrum, it’s important to ensure tax rules and retirement savings incentives are fit for the future and work together without unintended adverse consequences. Issues with highly paid health professionals in the NHS scheme have shone a light on the sheer complexity of rules around pension lifetime and annual allowances. These are penalising an increasing number of people saving for retirement, encouraging some to refuse extra work or to retire early. We need a long-term solution and not just a sticking plaster for the NHS.”
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