Are Pensions History

Are Pensions History?

Much has been written in the financial services industry press this week about whether government thinking on long term savings is to not include pensions as we know it.

It is well publicised that the government is reviewing the whole issue of pensions and tax relief with an anticipation that government will move to a flat rate of tax relief for all which could be 25% to 30%.

Certainly, the move with Help to Buy ISAs and the new Lifetime ISA (from April 2017) that a 25% government bonus is added when savings are cashed in either for a deposit for buying a new home or retirement.  It leads us to believe that 25% relief only added when your reach retirement for normal pension savings could be the route.  It makes sense for government “cash flow” to stop tax relief at source and give it at the end.  This is a similar model to that offered in the US and Australia.

So why are we suggesting pensions are off the agenda?

Last week the Treasury issued a new leaflet called  “Ways to Save 2017”  https://www.gov.uk/government/news/ways-to-save-in-2017

Interestingly, the HM Treasury document doe NOT include pensions adding fuel to the fire.