Employers have called for no further changes to pensions tax relief, and for stability in pensions as they seek to keep up with all of the different policies being implemented.
The latest Confederation of British Industries/Mercer Pension Survey 2015 claimed that employers, particularly in the smaller to mid-sized firms, were struggling to stay ahead of all the various pensions and tax legislation being put through parliament.
Neil Carberry, director of employment and skills at CBI, said: “Recent regulatory changes, coupled with auto-enrolment and state pension reform, means that UK business leaders now crave stability.”
The 44 page CBI/Mercer Pensions Survey 2015, covered more than 160 businesses – from FTSE100 companies to small- and medium-sized enterprises – collecting data from the boardroom and pension experts at respondent companies.
On the need for the current framework to be preserved, 79 per cent of respondents said that reviewing pensions tax relief should not be a priority for government. Nearly half of the respondents (46 per cent) said some employees could cease saving into pensions if a change occurs.
“Businesses are clear that the current framework of pensions tax relief at the point of saving – while complex – is the best for encouraging pension saving”, Mr Carberry said. He added: “Losing this would remove company incentives, as employer-provided pensions are the only way to deliver low-cost savings at a substantial scale at levels above automatic enrolment rules. A change would also cause damage to the fiscal position in the long term.”
Fiona Dunsire, chief executive for benefits consultant Mercer, said: “It is vital that the UK’s approach to pension tax relief remains unchanged, as it is important to avoid imposing unnecessary cost on businesses.
“Our clients are still dealing with the introduction of pension freedom and auto-enrolment as well as preparing for the end of contracting out, so there is little appetite for further reforms.”
Laurence Sanderson, financial adviser at Essex-based Sterling & Law, said: “I completely agree with the main conclusions of the CBI report. It is distracting to members of the public and counter-productive if they do tinker with pensions tax relief. But of course pensions tax relief is an easy target for a government seeking to raise more money to close the deficit.
“I do not like the idea of a pensions Isa, either. On one hand, the government is saying that there is not enough saving for retirement income and, on the other hand, it is watering down incentives for that saving.”