Opperman issues support for Pensions Commission

Pensions Minister Guy Opperman has issued his support for the creation of a new Pensions Commission and said that it is something that the Department for Work and Pensions (DWP) is looking at.

Speaking at the Conservative Party conference, Opperman said that a Pensions Commission is necessary to bring together the political parties to form long-term retirement policy.

He stated: “It seems to me that the logical way forward is, at some stage, a government, whether it be this government or a future government, has to have another Pensions Commission.

“The success of pension law it seems to be is predicated on a cross party long-term approach and if you don’t do that on a long-term basis, I think you will be in difficulties making these sorts of long-term changes.

“The nuts and bolts are complex, but it is certainly something that the DWP is looking at.”
The first Pensions Commission was set up in 2002, and chaired by Adair Turner, reporting on the state of the pensions industry between 2004-2006.

AJ Bell senior analyst, Tom Selby, was positive about the suggestion, but insisted that if it was reformed, it must set about tackling the overcomplicated pension tax system.

He said: “The fact the Pensions Minister sees the value in such long-term thinking bodes well, but the government must broaden its thinking beyond the horizons of auto-enrolment to including pension tax relief too.

“While workplace pensions policy has been a relative sea of tranquillity, storms have been stirred up by the Treasury through incessant changes to retirement savings incentives in recent years.

“Since 2010 the annual and lifetime allowance have both been cut three times, while a hideously complex ‘tapered’ annual allowance has been brought in for higher earners.

“In addition, in 2015/16 the ‘money purchase annual allowance’ was introduced at £10,000 for those who had flexibly accessed their pensions – before being unceremoniously slashed to just £4,000 in 2017/18.

“This constantly moving feast puts people off saving for retirement and risks fundamentally undermining the central objective of auto-enrolment.

“With auto-enrolment fully in place, now is the time to instigate a review of the entire system, including pension tax rules, focused on simplification and encouraging more people to take responsibility for their own financial future.”

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