“We welcome the additional flexibility introduced by the Government but remain concerned the new freedoms due in April could be quickly reversed, following either a change in administration or a public loss of faith in the pensions system, should there be any instances of mis-selling,” says Russ Mould, AJ Bell Investment Director. “Our three Christmas wishes therefore all come with the same theme, namely a pensions regime which gives everyone the chance to plan properly for the future at what is still a time of financial and economic uncertainty for many.”
AJ Bell's three Christmas wishes are:
1. The re-introduction of a permitted investment list for SIPPs. This would help to stamp out the risk of mis-selling and fraud as pension holders consider all of their options, especially if it was accompanied by a concerted campaign to warn individuals of the dangers posed by any unregulated investments proposed by unregulated advisers.
2. An all-party commitment to preserving the integrity of the existing rules on pensions. A political consensus on the new pension rules – and particularly the death benefit – would be welcome, especially as savers may be tempted to act too quickly, or even rashly, if they feel the additional freedoms may only have a short life span.
3. The scrapping of the Lifetime Allowance for money purchase pension schemes. The Lifetime Allowance for most people is £1.25 million but primary protection, enhanced protection, fixed protection, individual protection and fixed protection (2014) mean the system is unduly complex, especially when the Government's finances mean it should be doing everything it can encourage to everyone to save and reduce their reliance on the State pension.