Mr Trenner is not keen on politicians meddling too much with pensions, either.
“This is all about government’s deciding how they can do things to win votes. Pensions, now they are high profile, are a target for politicians who don’t care about the long term. Someone 30 years off retirement needs to know what will happen to pensions over 30 years and [that affects] what people do short term.”
Mr Tilley agrees: “We have a new government coming in and all parties have said they will be reviewing this after six months to see how it pans out, which doesn’t bode well because the things that hit the headlines will be the ones that go wrong rather than the ones that go smoothly. So we can’t even plan with certainty that in three years’ time all these flexibilities will still be there.”
Nyree Stewart is features editor at Investment Adviser
EXPERT VIEW
Rachel Vahey, independent pensions consultant, says:
“One of the biggest [areas of] meddling [by politicians] has been the reduction in the lifetime allowance by the coalition government – the [announced] reduction in 2011 back to £1.5m was understandable as a way of avoiding the previous Labour government’s convoluted method of reclaiming tax relief for very high earners.
“But the further reductions to £1.25m in 2014 and the recent announcement of a reduction to £1m [from next year] were just dipping into the pension pot to boost tax revenue. Ideally, as we limit contributions on the way in, I would love it if we could just get rid of the lifetime allowance altogether. And that would include the complex layers of protection we have. This would be a positive step forward, and one that would make a lot of people’s lives simpler.”
