RegulationNov 19 2015

Fidelity urges Osborne to give employers break on pensions

Search supported by
Fidelity urges Osborne to give employers break on pensions

Employers are complaining changes to the annual allowance are a “pain in the backside”, according to Fidelity International’s head of retirement, who has called for a delay in next week’s Autumn Statement.

Speaking to FTAdviser, Richard Parkin said that many of their clients are “pulling their hair out” as there is no obvious solution and they are unable to give personalised advice in the workplace.

“We’re concerned about employers tolerance for any more pension changes, given many are still struggling through auto-enrolment, the impact of charge caps and the pension freedoms, which are all taking their toll in terms of costs and communication.”

He noted that this could well be an opportunity for financial advisers to help individuals with their tax problems, but employers need a break, possibly in the form of George Osborne postponing the introduction of a tapered annual allowance set to be implemented from April 2016.

“It’s a whole lot of palaver, which won’t generate much money and will only last for 12 months.”

The rules are complex, introducing “significant uncertainty” and additional costs for the individuals affected and their employers, commented Mr Parkin.

“The chancellor has flagged that he will be announcing further changes to incentives in the 2016 Budget – expect these to impact high earners, to be relatively radical in nature and to be effective within a relatively short time frame – perhaps as early as April 2017,” he argued.

“It therefore seems unreasonable to expect employers and pension plan trustees to introduce and operate special arrangements for high earners that will almost certainly be changed within 12 months and probably won’t generate significant savings for government in that time.”

Earlier this month, Mr Osborne confirmed that the results of the government’s consultation into the taxation of pension savings will be delayed until in next year’s Budget.