On the slow train back from Kingswood I glance at my tweets
What has got Jo’s goat up?
The pre-brief given to journalists on Sunday evening made no mention of the different tax treatments for those below 75 and those above it. In case you haven’t been following my blogs, the only people to get the tax free transfer of pension wealth are those in drawdown under the age of 75, if you make it to your 75th birthday, your kids are in for a 45% tax bill.
What’s riling Jo is that the Treasury has tried to put one over on her. If you are the rising start of the FT, that stinks. Jo has rightly had the respect of the Treasury but the Treasury is no respecter of reputations when a good news story is essential.
The FT ran a sceptical story on the press release and were right to do so. The anachronistic cliff edge of 75 is a nonsense, how would you feel if you were 74 and had a terminal illness? Live another week and cost your kids 45% of your pension?
With Tory MPs defecting to UKIP and the Conference in need of a fillip, selective disclosure was the order of the day. So Jo had to report a partial story along with the 4th estate,
Of course the omission was material, David Robins’ research shows (thanks Alistair Cunningham and Will Aitken for feeds).
Which shows the vast majority of us don’t stand a chance of benefiting from this tax bonanza – those who do will be the ones who can afford clever tax advisers – so much for tax-simplification- so much for closing the loopholes.
Pensions are in a mess. People have been fed disinformation about their retirement rights that they have lost confidence in what is going on. The Pension Freedoms are supposed to put people back in charge. “Engage, educate and empower”, the mantra of Guidance depends on the integrity of the information.
Those of us trying to engage, educate and empower are looking for leadership from politicians. This is why Jo Cumbo is angry, this is why I am angry.
I never saw the press release Jo got on Sunday night. I was embarrassed at having to rewrite my blog on Monday morning when the Government’s second press release arrived. I thought that I’d misled my readers earlier in the morning.
The policy is a mess, it is half thought through and it will hand a few rich people a tax-break they never expected (and hardly deserved). The tax breaks for pensions are already loaded to the rich , it is the poorest and least savvy who will pay through the nose for these windfalls.
If I had my way, we would use the inheritance tax system to tax residual pots from drawdown and use any money saved from the scrapping of this abysmal cock-up to properly fund guidance.
That way we’d get rid of the propaganda and start getting to grips with the cold realities of funding for old age.