“George Osborne’s failure to reduce workplace pension tax reliefs may offer temporary respite but we can only hope that the Treasury has finally got the message that the country cannot afford for pension savings to be treated like cash cows,” comments Kevin LeGrand, Head of Pensions Policy at Buck Consultants, in response to the Autumn Statement.
“The considerable efforts and investment of the DWP and much of the pensions industry over the past few years, in trying to secure a stable workplace pensions system for the benefit of the whole of the UK, has constantly been undermined by the Treasury’s blinkered slashing of the very tax reliefs that underpin it. While there is room for sensible debate on the amounts and form of tax relief on workplace pensions, this does not seem to have been the basis of the Treasury’s actions.”
LeGrand continues: “Increasing the state pension age is a positive move. It is a necessary policy, particularly if it results in people being economically active for longer. Whilst increases in life expectancy are to be celebrated, there is no reason why such celebration should include an assumption that any additional years should be spent economically inactive, bankrolled by the younger population. However, those affected will still require income. If that does not come from remaining in paid employment, they will have to rely upon greater savings, and/or welfare, therefore raising the state pension age should only be one part of the government’s policy.
“Today’s announcement is enhanced by the statement that the fixing of the state pensions age in future will be based upon a report by independent experts, taking into account not only the latest demographic data available at the time, but also wider factors. Hopefully those wider factors will include recognition of the issue of the large variations that exist in life expectancy across the country, and some fresh ideas on equitable solutions.
“The level of academic rigour, broad overview and independence from excess short-term political expediency that this suggests should be extended across the whole pensions policy-making piece, to bring a proper long-term, consistent approach to workplace pensions policy, freeing it from the curse of uninformed party politics.”
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