Shortlived reform will prompt poor decisions: AJ Bell

Shortlived reform will prompt poor decisions: AJ Bell

Savers could rush retirement income decisions because they fear the pension freedoms will soon disappear, Mike Morrison, AJ Bell’s head of platform technical, has warned.

Mr Morrison said people could rush into poor decisions because they feared the new pension flexibilities, which are coming into force in April, could be shortlived under a new government if policy makers continue to use pensions as a political football.

Mr Morrison called for reassurance from political parties that the pension rules would last at least two years. There is also a concern that there might be further tinkering with taxation rules around pensions.

Article continues after advert

Last week, AJ Bell pressed HMRC to prevent some taxpayers being hit with automatic emergency taxes over their pension pots. Following this, an HMRC clarification made to AJ Bell stated that emergency taxes do not need to be applied where a tax code was held for an individual and the provider’s systems can separately report the flexibly accessed element of the person’s pension.

The HMRC clarification stated that if this were the case, providers would not need to apply a ‘month one’ rate, which would multiply any payment and apply tax on the annual equivalent.


In November 2014, David Blake, director of the Pensions Institute at the Cass Business School, published the 17-page Independent Review of Retirement Income Consultation Paper, after the review was commissioned by the Labour Party.

The review seeks to evaluate the predictability and value for money of the retirement income produced for a given level of planned pension savings in defined contribution schemes.

Adviser view

David Gibson, director of Londonderry-based Gibson Financial Planning, said: “I would be surprised if a political party would tinker with something that is so popular.”