We have heard a lot in the media recently about potential pension legislation changes. The removal of higher and additional rate income tax relief on pension contributions, lower levels of tax-free cash to be drawn from pensions etc.
Why would any government do this? To raise income or save spending as much, to reduce or limit state spend. For short term political gain. We need long-term cross-party policy on pensions, messing with pensions for a quick political win is a mistake.
Pensions can be funded for 30, 40 or 50 years, we need stable pension legislation for the very long term. You can’t fund pensions on one basis and then somebody moves the goalposts just before you want to retire or draw your pension benefits.
The state (both major political parties) want us to fund our own pensions to take the onus of State Pension provision. Auto Enrolment introduced in 2012 was another step in the right direction as far as the State is concerned, trying to get everybody to have a pension.
If you keep changing pension legislation the key issue for me is that you will erode confidence in pensions and this in turn would lead to lower rates of pension funding. You need a lot more than Auto Enrolment levels of pension funding to get a reasonable level of pension income in retirement.
If you get the opportunity please ask your local MP to leave your pension alone, we need to maintain the status quo, or we will erode confidence in the pension system in the UK – this will probably lead to people falling back on the State. Our politicians need to understand this.
We need long term plans for pensions with a cross party consensus, they are not a short-term issue or piggy bank to raid.