Pensions industry shares 'wish list' for new PM

Pensions industry experts have identified a number of key areas they think should be addressed following the appointment of Liz Truss as Prime Minister (PM) yesterday (5 September).

While Truss has pledged to continue the state pension triple lock, speculation as to other pension issues that could be addressed by the new PM is growing, with a number of industry experts sharing their 'wish list' for the new PM.

Hargreaves Lansdown, for instance, has urged Truss to revisit the money purchase annual allowance, pointing out that those who accessed defined contribution (DC) pension savings to help address financial strains can only contribute £4,000 a year after this.

“People who have had to raid their pension to make ends meet or are returning to work to boost their pension to cope with soaring bills face a pension headache,” Hargreaves Lansdown senior pensions and retirement analyst, Helen Morrissey, stated.

“The money purchase annual allowance of £4,000 was introduced to stop ‘recycling’, where people access their pension and then re-invest contributions for another round of tax relief, but the same thing could be achieved with anti-recycling rules, which only kick in when someone has accessed their pension with the express intent to recycle the cash."

Furthermore, although details of Truss’ cabinet are yet to be confirmed, PensionBee CEO, Romi Savova, urged the new Pensions Minister to “focus on putting consumers back at the heart of pensions, by finally legislating a 10-day pension switch guarantee.”

She stated: “Newly appointed Prime Minister Liz Truss will have a multitude of immediate decisions to make, in order to bring certainty and stability to businesses and consumers alike, at this tumultuous time.

“As we are experiencing a supply-side problem, I would urge the new Prime Minister to prioritise policies that support consumers and businesses in the short term, instead of measures that kill demand.

“It’s imperative for the government not to tip the economy into an unnecessary recession by raising taxes.

"The new Prime Minister should not be afraid to borrow a bit more; and choose versatile short-term policy measures that are quick to implement but equally quick to reverse, such as cutting VAT.”

Truss will also be expected to provide further detail on plans to address issues around pensions taxation, having previously committed to addressing pension tax issues that are leading to senior NHS staff retiring early.

Wesleyan Group head of medical, Alec Collie, argued that this work is “particularly important now”, as rising inflation will mean “many more clinicians” could now receive an annual allowance tax charge for last year’s pension growth, while more could receive one for this year too if inflation continues to climb.

He continued: “Liz Truss faces an NHS that is grappling with severe workload and workforce challenges. She’s said that slashing backlogs will be one of her top priorities, and all eyes will be on what concrete steps she now takes to deliver real change.

“One rumoured action she has on her ‘to-do’ list is to fix the pension tax rules that we know are stopping doctors from taking on extra work, and even forcing some to leave the NHS altogether. Changes to the lifetime allowance have been mentioned, but addressing issues arising from the annual allowance will be essential too.

“We simply can’t afford to lose any more skilled, dedicated professionals from our hospitals and GP surgeries. Anything that penalising them for continuing to go above and beyond for their patients is simply unacceptable.”

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