UK - Pension funds have criticised Chancellor Gordon Brown for failing to address any of the issues facing the industry in his Budget.
The NAPF had hoped for a review to look at retirement flexibility and a one-off change in tax rules to help part-time workers affected by the Preston judgement in the House of Lords last year.
It had also called for the abolition of stamp duty on equities and the scaling back of the 4% duty on property transactions.
The NAPF said: “It was particularly disappointing that this year’s Budget made no mention at all of the public concerns about pensions provision, preferring instead to focus exclusively on the NHS. In fact, there was nothing to encourage any form of savings and nothing to address the other issues raised.”
It added: “The Chancellor had a golden opportunity to address the questions facing the pensions industry. It is a source of regret that he failed to do so.”
And the industry was particularly scathing about the closing of tax loopholes on property investments and Brown's blunt refusal to reduce rates stamp duty.
Royal London Asset Management head of property Richard Pardoe said: “This will serve to make liquidity even more difficult, putting a nail in the coffin for property investments. The place of property in pension funds has been declining which is largely due to the lack of liquidity.”
Pardoe claimed that rules enforced in the Budget to plug the loophole on property investment was a further administrative burden which would deter pension fund investment in property.
Association of Property Unit Trusts chairman Ian Mason said: “The government needs to realise that a tax of 4% on major property transactions acts as a barrier for investors looking to diversify and enter the property market.
In sharp contrast there is a 0.5% duty on shares and 0% on bonds, putting property at a distinct disadvantage in investment terms.”
By Jonathan Stapleton
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