Don’t play politics with our retirement

The new Pensions Minister and erstwhile ‘consumer champion’ Ros Altmann has been suggesting that pension companies need to get their acts together and start to follow the spirit as well as the letter of the Government’s new pensions rules. I think the phrase she used was something along the lines of pension companies starting to let their customers ‘use their pensions like bank accounts’.

At the same time we’re reading of many financial advisers who are having to turn away prospective clients who are asking them to lie about the fact that a consultation took place to allow them to transfer the benefits from their final-salary scheme into a personal pension so that they can then take advantage of the Government’s new freedoms.

There is a reason that advisors are refusing these requests, just the same as there is a reason that pension companies are refusing to allow pensions to be used like bank accounts.

It’s because pensions are not bank accounts, and shouldn’t be seen as such. And if anything is wrong with all of this it is not that pensions companies are being slow to move, but that the government was too quick to move, and move in a way that was poorly thought out and runs counter to the whole reason for us having restrictions on the way pensions can be accessed in the first place.

Pensions legislation has been changed beyond all recognition by successive governments more interested in winning a popularity contest than in ensuring that people are able to plan strategically, confidently and sensibly for their retirement. At the moment a 25 year old has no idea of the shape that pensions legislation will have when they get to retirement age. More importantly, and more worryingly, they have no idea when that retirement age will fall, and what provision will be available from the State at that time.

It’s time to divorce pension legislation from short term political posturing and party political games, and start to think about pension provision in the longer term and in a way that benefits everyone trying to plan in advance for the income that they will need the day they stop work.






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