Seeing The Funny Side?
This blog is meant to be light hearted comment on the pensions industry, but sometimes it is difficult to see the funny side. For example the Budget news that the government is intending to plough on with the measures for restricting contribution tax relief for high earners rather than simply reducing the annual allowance. This is downright depressing as it ignores the almost unanimous pleas from the industry to deal with the issue much more simply (how often do we all agree on something!), and frankly the new rules are complicated enough already and it looks as if they will get even worse, if that's possible.
I heard a great comment, said to be from a European pensions expert, that the UK pensions scene is like a "50 year old building site". Very true, and the building shows no sign of getting finished. If you want a much more detailed analysis of all that's wrong with UK pensions, I would recommend reading the excellent policy paper by Malcolm Stone of the Institute of Directors via the following link.
Positive points from this paper are that the public are aware that they need to do much more for their retirement, pensions need to be clear, simple, affordable and flexible, and SIPPs and group personal products are success stories. The public do want pensions, but they are turned off by arcane complex rules, which are a disincentive to save and surely the wrong message?
SIPPs in particular can deliver what's wanted, but there is nothing they can do about complicated government rules. Governments need to realise that simplicity in pensions is far more important than meddling because of political views about tax reliefs.
Let's look at reasons to be cheerful though. Spring (albeit a chilly one) is just about here, the 5 April rush is almost out of the way and I'm glad I'm working for a SIPP company and not elsewhere in the pension industry. In a couple of month's time we should have a new government and, who knows, we might see some changes for the better. Now that would be good news.