ELECTION promises, they are so hard to keep, aren't they? On April 11, the Conservative party said in a pre-election briefing that
we believe that the pensions tax relief system will be fair and affordable and we will not propose any further changes to the system during the next
Parliament
But times change. The election came and went and three whole months elapsed before the Budget on July 8, when George Osborne consulted on a massive change to the pensions tax system. Given that the consultation document must have taken a month to prepare, George's conversion was positively Damascene. The proposed change would be to remove upfront tax relief for pensions contributions. That kind of change will doubtless come under fierce attack from, er, the Conservative party which said in February that
the principle that the vast majority of pensions contributions should be free of tax is fundamental to our whole pensions and savings system and changing that would do huge damage to our savings culture and our economy
To call recent British pensions policy a dog's breakfast would be an insult to canine palates. Governments have struggled to reconcile a desire to encourage saving for retirement, particularly among poorer workers, with a desire to control the cost. In 2006, pensions simplification was...Continue reading
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