Pensions minister Guy Opperman has today hinted the Government could back a new independent Pensions Commission to address a whole host of retirement issues, including tax allowances and raising automatic enrolment contributions beyond 8% of relevant earnings.
He made the comments at the Professional Pensions ‘Pensions and Benefits UK’ conference: https://www.professionalpensions.com/professional-pensions/news/3077967/opperman-i-can-see-force-of-fresh-pensions-commission
Tom Selby, senior analyst at AJ Bell, comments: “Pensions are brilliant but the complexity that has crept into the system undoubtedly turns people off. We currently have three different annual allowances and a lifetime allowance, all of which need to be explained to potential savers.
“It’s no wonder many people simply switch off or decide something they think is simpler – such as investing in property – is a better option.
“AJ Bell has long campaigned for an independent commission to review the pension tax regime, with the aim of simplifying the system and encouraging more people to take responsibility for their retirement.
“It would make sense for this to be undertaken in concurrence with reviews of other parts of the system, such as raising auto-enrolment contributions and boosting saving among the self-employed. Given millions of people save in ISAs alongside pensions the Government should consider looking at this increasingly complicated part of the market as well.
“If such a wide-ranging review is to succeed it must command cross-party support and come with a commitment to stability over the long-term. Simplification can only endure if politicians agree not to constantly tinker with the rules in the future.”