Pensions  

Adviser slams gov’t ‘tinkering’ with pensions

Daniel Liberto

Paul Gibson, chartered financial planner for Aberdeen-based Carbon Financial Partners, said “incessant changes” had created “untold damage” and undermined efforts to promote pension saving in the UK.

He was particularly frustrated with the government’s move to reduce the lifetime allowance and the imposition of caps.

Mr Gibson said: “My plea would be for politicians to stop constantly tinkering with pension legislation. They do not seem to realise the untold damage they have caused by their incessant changes.

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“The reduction in lifetime allowance has caused huge difficulty for clients planning their financial futures. I also fundamentally disagree with caps on how much you can pay into a pension and how much you can take out. The cap should be on pension contributions only.”

He added that the changes penalised people who obtained strong investment performances on their pension funds, which contradicted the benefits of saving for retirement in the first place.

From the 2014/2015 tax year the lifetime allowance will reduce from £1.5m to £1.25m and the annual allowance from £50,000 to £40,000.

HM Revenue & Customs previously estimated that 30,000 people would be immediately affected by next year’s lifetime allowance cut, with 360,000 expected to break the new lower limit in the longer term.

Adviser comment

Carole Nicholls, managing director of Bristol-based Nicholls Stevens, said: “Pension legislation has always been changing and I personally think it is very good for business. If you are in the business of giving advice, some of the changes will create new opportunities which certainly is not a bad thing.”