Last chance saloon to make your views heard

Ken Davy

Ken Davy

In my article published here on the 13 August, ‘Help Shape The Future’, I urged you in the strongest terms to make your voice heard regarding the current Pensions Tax Relief consultation and the financial advice market review.

I truly believe that if you do not make the time to express your opinion when asked for input, you cannot complain if the final decisions do not suit you.

In my response on behalf of the SimplyBiz Group, I covered a number of points and have summarised the key headlines below

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We strongly support the government’s objective of offering clear simple and transparent initiatives to savers to encourage them to accumulate enough during their working lives to meet their aspirations for a sufficient standard of living in retirement.

We also agree that the current system of tax relief is expensive and wasteful of government revenue, giving far too much tax relief to those who need it least, through higher-rate tax relief. By the same token, many less well-off savers and potential savers have little understanding of the impact and benefit of tax relief. Indeed, higher-rate tax relief is something that I have personally argued against for over 30 years.

We have also voiced our belief that combining pension and Isa contributions would not work, and commented that the two are, and should remain, separate and distinct. The motivation and incentive for contributing to either are poles apart and therefore the concept of combining contributions is a flawed one.

In our response, we have outlined a potential solution which I believe would greatly simplify and clarify the position for consumers; namely replacing tax relief with government bonuses. Although space restricts me from going into full detail about this proposal here, it would effectively replace the present wasteful tax reliefs with meaningful targeted incentives. At the same time, it would also dramatically reduce the current budget deficit and ensure that pension savers always enjoyed a meaningful, inflation-proofed return.

Although the closing date for responses on the pension tax relief consultation has now passed, there is still time to make a contribution to the financial advice market review. This review has the potential to have a bigger impact on the financial services sector than the RDR. If you have a view on the future of the profession in which you work, now is the time to make it known.

Ken Davy is chairman of SimplyBiz Group