UK - Pension simplification will cost twice as much per year as retrospective compensation for workers with lost pensions.
The Inland Revenue says introducing the simplified pension regime would cost the exchequer “a few hundred million pounds” for the first three years.
Revenue spokesman Peter Hopkins – speaking at the Pensions Management Institute Spring conference – said its estimates are £15m in 2006, £50m in 2007 and £135m in 2008 – due to more people taking advantage of tax breaks.
But former government pensions adviser Ros Altmann (pictured) countered arguing that the annual cost would “quickly exceed £200m”.
The figure, she says, is approximately twice the annual cost of compensating the 60,000 workers who have lost their pensions though the collapse of their employer.
Altmann said compensation would cost “less than a hundred million pounds” a year.
She said: “How can the government justify spending hundreds of millions of pounds on giving the highest earners more tax-free cash from their £1.4m pensions, yet refuse to spend taxpayers’ money of less than £100m a year, to restore confidence in our pension system and to give these people back the pensions they saved for?”
Department for work and pensions spokesman Peter Askins said the subject remains a “highly politically-charged issue”.
He said: “We are looking into retrospection but do not want to raise hopes.”Altmann received backing from delegates who claimed politicians failed to understand “long-termism” which was essential to pension provision and argued compensation was a valid use of taxpayers’ money.
Life expectancy in the UK saw no improvement between 2015 and 2017 as the number of people aged over 90 hit a record high, latest Office for National Statistics (ONS) data reveals.
Self-administered pension funds spent £14bn on payments to pensioners in Q2 2018, but only received £11.4bn of contributions (net of refunds), latest Office for National Statistics (ONS) data reveals.
The Pensions and Lifetime Savings Association (PLSA) has named the 17 members of its inaugural policy board after a competitive application process with 60 candidates.