Calum Cooper informal

The download of Hymans epic has been by far the most downloaded document I have posted this year with well over 1,000 views.

Here it is again, readable and from this link downloadable

The point of re blogging and further promoting the publication is that it is very good, very relevant and – at a time when we need a reset of the way we do private pensions, this is very relevant.

I spoke last night with one of the authors , Calum Cooper, who was down from West Glasgow. West Glasgow is from where some of my good elderly friends got their education 60 years ago and one that I know nothing about other than it had a good school!

I have been through this document several times and sure there are ideas here that need more development before they make it to a Government consultation but let’s have the conversation and let’s get our Pension Minister involved in how we organise the incentives for rich and poor to get themselves a fair deal from pensions.

I am very worried that the poor are getting left behind by HMRC and HMT. I have written more about the appalling delays to those who have been in pensions and missed out on pension incentives of  £70 (on average) over the past ten years.

But the problem came about because people on low income are fiscally unaware of how pension incentives work. Tax relief is not an incentive for the poor, it is only an incentive to those who pay tax and most important who pay a lot of tax.

Hymans have moved beyond the discussion we had in 2015/16 when Osborne’s Treasury considered moving to a TEE system of pension taxation. They backed aware because there was no support for a better system from the fiscally unaware and a load of opposition from those who paid 40% and more in tax and could offset much through pensions. We have seen more angst from the rich over the planned end to inheritance tax advantages for those growing old pension pots and no pensions.

In my view the tax section of the Hymans Robertson paper deserves a proper examination because it asks that in exchange for a loss of tax relief , people – especially poorer people – get more investment in their pensions. There is not space here to properly explain, I hope that Hymans will publish more in time, this idea has legs.

Another idea that we discussed last night was the capacity of pensions to become collateral for lenders wanting to offer mortgages. This has been widely interpreted in commentary on the “untapped potential of pensions” as a means to raid your pension to buy a house. That is not what is being promoted. The money that would be used as collateral (instead of a deposit) would remain in the pensions. It would only be drawn from the pot if the mortgage payer defaulted and then it would be the means of the lender recovering a loss.

If we cannot see advantage of using pension saving as a means to move the nation on from renters to owners of their property then what is the advantage against?

I understand from Calum Cooper that so far we have not seen interest from those in the DWP and HMT most able to discuss these matters. This is a shame. I know that many DWP and HMT civil servants and even Ministers read what is published in this blog and I hope that they will see that I am promoting Hymans work without advantage other than we need a better private pension system.

So let’s hope that Calum and others get a call from Government to get a proper discussion and a proper consultation under way.

Calum formal