UK - Chancellor of the Exchequer Gordon Brown's pre-budget report was received with scepticism by industry watchers this week.
Commentators accused the Chancellor of doing next to nothing to promote savings ahead of the Government’s Green Paper due out on December 17.
Wednesday’s announcement saw, contrary to rumours, the pensions lump sum remaining tax-free. Tax relief on pension contributions would also be retained.
Chairman of the National Association of Pension Funds, Peter Thompson, said: “We are disappointed that the Chancellor showed no indication of boosting tax incentives for occupational pension contributions either for employers or employees.
“We look forward to the forthcoming Green Paper, and the Inland Revenue simplification report and hope that they will take a more radical approach. I hope that the delay in the Green Paper means that the Government is seriously considering some of the issues facing UK pensions at the present time.”
Mercer Human Resource Consultants described the Chancellor’s speech as a “step in the right direction”.
Research actuary at Mercer, Paul Greenwood, said: At a time when pensions are in turmoil, no adverse action by the Government is the least we could hope for, but retaining the status quo is not going to be enough to provide people with the incentive to save for retirement.
He added: We would like to see the Government go much further in its proposals, and take positive action to reform the pensions system. The Green Paper will be the real measure of how seriously the Government is taking the issue.
Unfortunately, the Pre-Budget report gives no indication of planned increases in Government spending to restore incentives to the private pension sector. Neither is there any sign that the now extremely complex State pension structure will be simplified, which is bad news for those who hoped the Green Paper would include proposals in these areas.
The secretary of state for work and pensions has told MPs clawback and avoidance measures could be imposed for the people responsible for driving Carillion over the cliff.
Occupational pension provision has continued to grow in value, but there remains large variance in incomes across the pensioner age group, according to latest government data.
Defined benefit (DB) schemes could have an aggregate surplus by 2021 under Pension Protection Fund (PPF) projections, its strategic plan for 2018 to 2021 reveals.
Investment consultants are failing to recommend products that outperform net of fees, the Competition and Markets Authority (CMA) has said as its investigation into the market continues.