Royal London response to the pensions review in the summer Budget
8 July 2015
Fiona Tait, Pensions Specialist at Royal London, responding to the Summer Budget said:
“It's great news that the Chancellor has resisted the temptation to make further changes to the treatment of pensions without consultation across the industry and with all those impacted by the potential implications. Pension rules were substantially changed in 2014 and there are more changes next year with the introduction of the new flat rate State pension, so a period of consultation will allow people to become more familiar with the proposals and the potential advantages, as well as any limitations.
Any changes, if not fully considered could disappointingly create a disincentive for people to continue to save into a pension for their retirement. This would undermine the great momentum and success that we’re seeing with the roll-out of automatic enrolment, which to date has resulted in a substantial increase in the numbers of people saving into a pension. With the market continuing to evolve, it would be sensible to take time to ensure that any further changes are understood and that the recent freedoms are working effectively, before too many changes are made.
Royal London would certainly not wish to see the tax relief on pension contributions axed completely. The aim of pension tax relief is to encourage people to contribute into a pension arrangement so they are able to build up their own savings and are not totally dependent on the state. Although the scaling back of the higher tax relief will help to redistribute the tax benefit availabfle to those who potentially do need to save the most, if people wish to have an income that will support their lifestyle in retirement, adequate savings in a pension is crucial.”
For further information please contact:
Gareth Evans 0207 506 6715/ 07919 170069
Berni Ryan 0207 506 6740/ 07919 170127
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £86.3 billion. Group businesses serve around 5.3 million policy holders and employ 2,859 people. (Figures quoted are as at 31 March 2015).
The Group is currently moving all of its UK businesses under a new version of the Royal London brand. The Group's independent wrap platform will remain branded Ascentric.