If anyone were asked to compile a list of ways to fund one’s retirement, you would assume that a pension (or even more than one) might be at or near the top. But that doesn’t apply to the Treasury apparently – triggering an ear bashing from ex-ministers and pension experts alike.
The latest Treasury infographic on ways to save through life has just been published. On there you’ll find a handy snapshot of products like different ISAs. Even the good old premium bond gets a mention. But the omission of one of the principal ways we put aside funds for later life seems to have been lopped off the list: pensions.
The frankly peculiar omission has provoked outraged ripostes from distinguished commentators such as Baroness Ros Altmann (“This shows UK private pensions are in mortal danger”) and Hargreaves Lansdown’s Tom McPhail: “This is illustrative of the Government’s struggle to present a coherent joined-up policy on savings, investments and provision for later life; it’s as if they’ve completely forgotten about pensions and help to save”.
The omission, believes Altmann, is indicative of a schism between the DWP (“pensions good”) and the Treasury (“pensions expensive”) – an attitude she found prevalent during her short time in office.
Certainly the space that the infographic gives to ISAs would appear to indicate that it is now definitely the flavour of the month.
The Treasury, lest we forget, has form on seeing pensions as a piggy bank to raid when funds are needed elsewhere in the system, notably during Gordon Brown’s time as Chancellor; and last year, George Osborn’s plans to scrap or reduce tax relief seemed to have been headed off at the pass only at the last minute after howls of anguish from a variety of sources.
The Government has since issued a response, saying that, of course they love pensions. Just look at our commitment to auto enrolment, they say. But for two major figures in the pensions world to raise concerns in this way may just be a timely warning that Governments of the day are just that: of the day.
Robin Day famously described politicians as “here today, gone tomorrow”, and history is littered with policies that demonstrate short-term expediency prevailing over long term planning.
Above all, perhaps the incident demonstrates the wisdom of having more than one pot in which to store funds for your future.
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