Budget 2017: The industry wish list
Ahead of tomorrow's Budget, PP looks at what the industry would like to see.
Here is a short summary of this year's wish list:
Leave tax relief alone
Aegon wants tax relief to be left alone and believes it will help the pensions system in three ways. It will encourage pension saving more generally and support the roll-out of auto-enrolment (AE); encourage self-provision for future care needs; support the government's aim to make defined benefit schemes more sustainable and affordable.
Aegon pensions director Steven Cameron said: "As the UK prepares to trigger Article 50 it is increasingly important the Treasury and Department for Work Pensions align their policies to protect and encourage savers to invest for their futures. The country is facing difficult issues, with an ageing population bringing with it a looming social care crisis and a potential pensions shortfall.
"Against a backdrop of continued low interest rates, the chancellor must do everything he can to encourage people to prioritise long-term savings. It might sound simplistic, but in an era of personal responsibility, this is what's needed."
Women and social care
Firstly, she would like to see Hammond recognise the national insurance (NI) rules penalise low earners and those with several low-paid jobs, who were typically women.
Secondly, she described the current child benefit system as "ludicrous" because it was forcing mothers to claim benefit, even though they are not entitled to it, in order to accrue a sufficient state pension credits.
Thirdly, she also noted the AE system discriminates against women in low-paid and part-time work.
"Anyone earning less than £10,000 does not have to be automatically enrolled into a pension and will not get the benefit of their employer contribution," she said.
Altmann also argued the Budget should do more to make it easier for people to provide for themselves in old age. The government could consider care ISAs, employer care saving plans, AE, eldercare vouchers and NI."Philip Hammond could be the first chancellor to introduce long overdue reforms of the broken care system. This should encompass both short-term and longer-term policies, including proper integration of health and care, extending NI and new tax incentives to help families prepare for care costs in advance by setting some of their savings or pensions aside, or saving specifically for care."
Empower savers
Hargreaves Lansdown is keen to see a number of measures it thinks could help individuals secure their future. It wants no more changes to the lifetime allowance, annual allowance, tapered annual allowance and money purchase annual allowance as this simply complicates life for savers.
It would also like to see stamp duty on the purchase of UK shares abolished as it views this as a tax on savers making investments to boost retirement pots.
Most importantly, it would like to see the government establish a method of communication with individuals once they reach 50. Senior pensions analyst Nathan Long said: "All evidence shows people only think about retirement when they are one or two years away from it. This is simply too late. If, for instance, the government sent a letter to everyone at age 50 about their pensions, this could raise awareness. Maybe they would contact The Pensions Advisory Service, their financial adviser or simply their provider. The point is to boost engagement with retirement earlier than currently."
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