Reeves Urged to Review Workplace and State Pension Funding

There is a great deal of mood music about means testing State pensions and of course, private workplace pensions are already taxed as income by HMRC above the usual thresholds. But these fiscal drags on retirement income will prompt more UK workers to plan a life on benefits, rather than save for their old age – especially as savings interest is also taxed. So cash that has been taxed already, is taxed again if it makes any interest annually, even it’s already been devalued by years of inflation. Not good as an incentive to save up is it?

So which route will this – and future UK governments take on pensions? Some thoughts here;

Ahead of the Mansion House speech to be delivered by UK Chancellor Rachel Reeves on the evening of 15 July, Glyn Bradley, Chair of Pensions Board at the Institute and Faculty of Actuaries (IFoA), said: 

“It is now time to review the workplace and state pension frameworks, including for the self-employed, and more importantly to make some decisions on how to help UK pension savers achieve a comfortable retirement. This might not mean immediate change but putting a roadmap in place for the future will help individuals and their employers to plan. 

“The IFoA is very supportive of guided retirement products that help individuals drawdown on their pension. We would like to see a clear, rapid path to their introduction in the UK. This includes options like ‘retirement only’ collective defined contribution schemes. Another area that requires immediate attention is the take up of pensions advice and guidance. Whether through encouraging better usage of government services like ‘PensionWise’ or through allowing those who can pay for advice from their pension pot, more access to advice will help UK savers plan their retirement. 

“Finally, a pensions adequacy review needs to think about pensions in a wider world. We would like to see a focus on the way people are encouraged to think about their pensions throughout their working life – this includes through better communication and enhanced provision of information, advice and guidance”.