Pensions are in the news again. In reality they haven’t been out of the news for the last year or two. We have seen a large number of changes introduced that have a dramatic effect on the way we access the money that is in our personal and company pensions as well as the age at which we can access the pensions that are due to us from the State. These changes have been introduced in a bit of a haphazard way by a Government that seems to have winning votes further forward in its thinking than having a sensible pension system in place for its citizens.
Most recently the focus has been on the age at which women will receive their State pensions, particularly women born after the 6th of April 1951, since they are going to be most affected by changes to the State pension age. Campaigners from the Women Against State Pension Inequality (WASPI) are saying that the women most likely to be affected by the changes have not received adequate notice of the changes and that there should be transitional arrangements in place to lessen the impact of the changes.
It’s right that the pension ages should be equalised but the Government should be taking a close look at the way they have introduced the changes. There is widespread confusion, and the women who are most affected by the changes do have a legitimate grievance about the lack of consultation and the dearth of information that has been provided on what is a fundamental and important change affecting the way we all plan for the income we need in retirement.
And it’s not just the way that the pension age changes have been introduced that have caused a problem. There are still a lot of people who are unsure about the impact of the changes that were introduced last year will affect them when they get to the age of 55.
And if all of that is not enough the Chancellor has already made it clear that he plans to introduce even more changes in his budget this year, this time to the way pension tax relief operates. It looks as though everyone who pays into a pension will qualify for relief at the same rate, regardless of the rate of tax that they pay.