OpinionJul 27 2016

Pensions policy in the long grass

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When the Coalition government took power in 2010 and Steve Webb was appointed pensions minister, I think it is fair to say the industry and commentators rejoiced.

After years of neglect here at last was someone who understood the vital importance of pensions and how they worked.

Last year when the Tories seized power Ros Altmann was elevated to the House of Lords and appointed to replace Mr Webb.

It was a popular and pragmatic decision. Once again, someone who understood and cared about pensions was placed in this crucial role.

That all fell apart a couple of weeks ago when Theresa May walked into Number 10 Downing Street and Baroness Altmann resigned.

Both she and Mr Webb are aghast that the role of pensions minister has been swiftly downgraded to a junior ministerial post. And so should we be.

This does not bode well for the future of savings and hints that both Mrs May and new chancellor Philip Hammond place less priority on pensions than did David Cameron and George Osborne.

Baroness Altmann faced a difficult task in her year in the post

Baroness Altmann faced a difficult task in her year in the post. Often, politicians make sweeping decisions based on statistics, which fail to take account of each individual – though David Cameron claimed in his resignation speech to be an exception.

One reason that Baroness Altmann has been such a successful campaigner is that every person’s story and circumstances matter to her.

This would inevitably lead to conflict in government, not least over the issue of raising the state pension age for women at an accelerated rate.

Baroness Altmann wanted to find a compromise or some help for women who had been badly affected. Iain Duncan Smith, when Secretary of State, proved to be an immovable object.

Any hope that was raised with the appointment of Stephen Crabb, was swiftly doused when May sacked him.

Baroness Altmann minced no words in her resignation letter when said: “Unfortunately over the past year, short-term political considerations, exacerbated by the EU referendum, have inhibited good policy-making.” Ouch.

She also stood up to the Treasury over its misguided idea for a pensions Isa.

One-year in office left her no time to make an impression over tax relief reform; for as long as I have known her, Baroness Altmann has favoured a single-tier relief system, but retaining the same overall £40bn of incentives.

But governments quake when even the mention of reform leads to negative headlines in influential newspapers.

Baroness Altmann pushed for a pension bill that would include several important policy initiatives designed to protect individuals’ pensions.

There is good reason to fear that this is in peril.

After six golden years with two ministers who instigated a progressive pensions policy we are at an uncertain junction.

The new prime minister may follow through with policies of her predecessor, but the industry must lobby furiously to prevent pensions being pushed back into the long grass where they spent most of the Blair and Brown years.

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Looking at the future of Lisa

What now for Lisa? The Lifetime Isa was George Osborne’s baby.

Had he remained at Number 11 Downing Street, Lisa would have been nurtured and certain of a long and fruitful life.

But George has gone and we now have a new face at the Treasury.

Will Philip Hammond choose to expand and improve the Lisa or will this become another savings initiative cast aside?

We have a rich history of savings ideas that have been abandoned, tweaked or left to wither on the vine.

Remember Tessa, the Child Trust Fund, the Savings Gateway, Peps?

Some have survived in modified forms, but often with tax incentives severely pruned as happened with Peps.

I suspect Lisa is on life support and Mr Hammond will want to do the sums and weigh the implications before he decides whether to pull the plug or resuscitate.

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FTBs are on the move again

Among all the gloom peddled in recent weeks there has been what I view as some excellent news.

Loans to first-time buyers in May outnumbered those to home movers for the second month in a row.

The Council of Mortgage Lenders said the 27,500 loans made in May represented a 16 per cent year-on-year increase.

Way back before buy-to-let, biennial remortgaging and the obsession with the top end of the market in Mayfair, first-time buyers were regarded as the barometer of the property market.

If they are beginning to make an impact again and more are finding their way on to the ladder then there must be something going right with our housing policy despite the worst predictions of the gainsayers.

Tony Hazell writes for the Daily Mail’s Money Mail section. He can be contacted at t.hazell@gmail.com