Steven Cameron, Pensions director at Aegon comments:
Pensions Bill
“However unsettled the political landscape is, the Queen’s Speech remains an important mechanism for the current Government to publicise its priorities for the coming Parliamentary session. We hope to see the much trailed Pensions Bill, which will pave the way for comprehensive pension dashboards, a new if controversial form of pension scheme called Collective Defined Contribution and new protections for members of defined benefit schemes.
“Of the three Pensions Bill topics, the aspect of greatest and most wide reaching importance is that concerning Pension Dashboards. While the industry working with the Money and Pensions Service Delivery Group can press ahead with many aspects of dashboard preparation, legislation is needed to compel all pension schemes and providers to supply comprehensive data and also to make sure that state pension information will be included. Without these elements, dashboard data will be full of gaps which could disillusion early users, losing the opportunity to turbo boost pension engagement.
Social care funding
“There is also the opportunity to confirm the Government’s commitment to resolve issues with social care funding by including a Bill on this topic. All major parties now agree there is a pressing need to tackle the growing problems of putting social care funding on a stable and sustainable basis. Our ageing population deserves clarity on what the state will pay for and what individuals will have to fund themselves, based on their wealth. For many, the key assurance they want is that under new rules they won’t have to sell the family home to pay for social care. There is also a need to commit to central Government funding to remove the current postcode lottery, and a cap on the overall amount anyone will have to pay themselves, allowing people to plan ahead and protect inheritance aspirations. Some measures and funding commitments might feature in a future Budget but the Queen’s Speech could pave the way for any primary legislation around more structural reforms.
Other pension priorities
“While not expected to feature in the Pensions Bill, there are other pressing pension priorities which need urgent Government attention. 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 also need to maintain momentum on improving the pension prospects of the growing army of self-employed.”
• Pensions Bill needed to empower pension dashboards and protect defined benefit members
• Calls for Social Care Bill to commit Government to long overdue action
• Other pension changes needed to grant non taxpayers pension tax relief they are due; stop higher paid NHS employees giving up work to avoid pension tax bills; and encourage more self-employed to save for retirement by ‘default’
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