The Prime Minister Theresa May should “put her money where her mouth is” when it comes to pension reforms, AJ Bell has said.

While Brexit is clearly at the top of the PM’s agenda following last week’s general election, there is still “some serious unfinished business on pensions policy”, AJ Bell senior analyst Tom Selby said.

AJ Bell highlighted that there is a largely significant savings policy agenda facing Chancellor Philip Hammond and the newly appointed Department for Work and Pensions Secretary David Gauke.

Of the pension policies that need to be addressed, the Money Purchase Annual Allowance was signposted as on the key areas.

Selby noted: “More than two months after a cut in the MPAA from £10,000 to £4,000 was supposed to have been introduced, we still don’t have the accompanying legislation. It would seem grossly unfair for HMRC to hit people who have accessed their pension flexibly from age 55 and subsequently paid in less than £10,000 with a tax penalty given the lack of clarity surrounding the policy. A sensible, pragmatic short-term solution would be to push back the cut until April next year at the earliest.”

He also stated that the proposed clampdown on pension scams must be implemented with immediate effect and must not be “knocked off course by political uncertainty”.

In terms of providing savers with some certainly, Selby added: that the PM “has placed huge emphasis on providing voters with certainty in the wake of the shock election result. She has the opportunity to put her money where her mouth is by putting a stop to pension tax relief tinkering and setting up an independent pension tax commission to place the needs of savers, rather than politicians, at the heart of any future reforms.

“The commission should develop proposals aimed at simplifying the system and recommend what, if any, reforms are needed to encourage more people to save for retirement.”

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