For those slipping quietly into retirement in the UK the political promises are about the revaluation of your state benefits, the payment of your winter allowance and the tax treatment of your savings and income.
Whatever you have done or not done is in the past, you are retiring , winding down from the business of working and getting into the business of spending. Alex Ferguson is reported he’s having problems with all this freedom.
So it appears are the Regulators.
My little pocket book Stella gave me after her trip to Greece reads
“For excessive freedom is nothing more than excessive slavery”
Plato said that
“Pension Freedoms without well-built/well-sold product’s no freedom at all”.
I said that
I blame Leonard Cohen for this grumpiness. Listening on an early bank holiday morning to the Grumpy Old Git makes me one too – I’ve got the mug to prove it (thanks Oliver- pictured).
So here are the five things I want from a new Government to cure my ole pension blues!
- The abolition of the lifetime allowance so that people can aspire to a decent retirement income from their pension savings. Flat rate relief on the way in – yes! Penalties on the way out – no!
- Scrap the tax on a tax. Abolish VAT for auto-enrolment services bought by micros unable to reclaim it.
- The duty on employers staging auto-enrolment to choose a pension and explain to workers why they’ve chosen as they have
- An easement to allow providers to pay intermediaries a fixed fee to onboard pensions.
- A commitment to legislate for collective decumulation schemes to help ordinary people spend their retirement spendings without the money running out.
These changes (most clarifications and reinforcements), I would add a further five things I’d ask a future Government to follow these five don’ts from the tower of the Pension Plowman.
- No further charge caps on decumulation assets. The cost of decumulating will fall organically if we can introduce collectives, but even before then , we must trust this new more transparent market to do it’s work, even the current cap is unnecessary, extending it doubly so.
- No changes to the auto-enrolment staging time-table. The Pension Regulator has alerted all employers to their staging date, many advisory firms are working to that timetable, please do not mess with the planning.
- No relenting on the miscreant firms subverting the reputation of pensions by nefarious charges to the net asset value of our pension funds (hidden charges). There is a crack in everything, that’s how the light gets in.
- No preferential treatment for NEST , NEST is a good pension but it is only good for certain types of employers. It should not be promoted as a one size fits all solution by Government and it should be called to account for its debt to the DWP.
- No change in pension minister ; with the anticipated (temporary) absence for the respected member for Cumbernauld, there is only one politician in this country that understands and promotes proper pension, that is Steve Webb. Whatever Government we have should include Steve Webb as pension minister.
Of course there are many more outside the scope of this blog. To discuss these issues and those you feel strongly about, come to our Pension PlayPen lunch on Tuesday 5th May at 12 for 12.30, the Counting House Pub, Cornhill – 200 yards East of Bank Station in the City.