There are several surefire signs that Christmas is not far way. The John Lewis advert arrives tugging at heart strings and pockets, Sky has a dedicated Christmas movie channel, a certain Slade song gets played on the radio and we have the Chancellors Autumn Statement. Now I might be getting a bit old for putting a Christmas wish list to Santa in the fireplace, but there is no harm in having a wish list for some things I would like to see covered by the Autumn Statement. So on my list I would have:
Measures to encourage saving
Encourage saving by making it simple, understandable and relevant. Tidy up the ISA options and don’t confuse the Lifetime ISA with a pension. Scrap the Lifetime Allowance, it’s not fit for purpose any more, and introduce flat rate tax relief (with a government bonus contribution) for earnings up to a maximum of £150,000 pa.
Millennials and the Golden Generation
Following on from the above, it would be good to see initiatives that seek to address the disparity between these two groups, encourage pension saving and give hope that retirement will be a reality for millennials.
Planning for the future
Incentivise workplace based financial education and commit to the Pensions Dashboard such that it can be extended to include an individual’s entire financial landscape. People can only sensibly plan for their financial future by looking holistically at what they have.
Ban Cold Calling and consider further measures to protect consumers from Pension Scams
Yes this is jumping on an already rolling bandwagon but it is something we have been saying for some time now. Given the statement over the weekend that the Chancellor is going to announce measures to ban cold calls, it is great to see that the government is listening and is supportive of an initiative that will surely add a level of protection for consumers against scammers. It won’t make the problem go away but it will help, a lot. But there is more that can be done, so will the government go further? Here are some thoughts from earlier this year on what could be considered.
Deal with the RPI/CPI question
From a Trustee perspective the uncertainty over whether CPI (or would it be CPIH) could replace hardcoded RPI in scheme rules is not helpful. A change going forward could be fine for a scheme. Where I have a problem is with retrospective changes. For members it would erode a promise made. The Chancellor could put this to bed by confirming that no retrospective change can be made to detrimentally affect accrued rights.
Pension funds are an obvious source of investment to develop the infrastructure and take ownership of the homes such that it acts as equity type investment – predictable income stream with underpinning property assets but it can do it through a tax incentivised fund on a non profit basis. This would be through a fund rather than individual schemes ‘doing their own thing’.
Leave pensions alone
One that has been a perennial favourite on many wish lists over the years is for nothing to happen at an Annual Statement or Budget as there has been too much tinkering in recent years which has lead to the complexity we see in the pensions world now. That said, this may be an unlikely, and as the rest of this wish list shows, unwelcome outcome.
As with any wish list you always ask for more than you are likely to get (but no harm in asking). However, I think financial services consumers deserve a little something to help them save for a comfortable retirement so let’s keep our fingers crossed for an early present or two.