Seven days is an awfully long time in politics.
It is also a long time when it comes to prevailing government policy towards pensions.
This time last week, I was singing for my afternoon tea at a splendid FTAdviser forum on retirement freedoms in London’s swanky Mayfair – before an audience of top-notch independent financial advisers (yes, I know, all advisers are top notch).
At the forum, which also featured key contributions from Pensions Minister Baroness Ros Altmann and Association of British Insurers’ director Yvonne Braun, I could not help but dedicate some time in my long-winded speech to mention the state of flux prevailing in pensions policy.
“Are we about to see the introduction of pension Isas?” I asked. “Or will a flat rate of tax relief on contributions replace the current system of relief that favours high earners?”
What I predicted, with my customary authority, was that the current pension status quo was about to change. How wrong I could be.
Today (9 March), I am singing again at another FTAdviser forum – but this time for my lunch and not in trendy Mayfair but in Birmingham, a city enjoying something of a renaissance with its resplendent Bullring shopping centre at its heart.
The main thrust of my speech will again be focused on retirement freedoms and in particular the growing threat of pension fraud perpetrated by so-called pension liberators (I would incarcerate every single one of them).
But this time, I will not be taking time out to talk about what George Osborne is planning to announce on pension reform in his Budget on 16 March. The pension horse, as we all know, has well and truly bolted. Like Joey did in Michael Morpurgo’s novel, War Horse.
After all the debate, argument and counter-argument, it seems as if Mr Osborne has bowed to political pressure within his own party.
Rather than embark upon radical pension reform, he has decided to put it on hold for fear of upsetting the middle class apple cart before the vote on Europe, scheduled for June 23. For the time being, the current system of tax relief on pension contributions is remaining.
So, some seven months of consulting in the wake of the publication of the Treasury document on ‘strengthening the incentive to save’ is being sidelined. There will be no ‘strengthening’, just more confusion, more prevarication and the perpetuation of a pensions system that is not fit for purpose.
Pension Isas, funded out of taxed pay, will now be put on the back-burner, as will a flat rate of tax relief on contributions.
In the wake of Osborne’s U-turn, Steve Webb, former pensions minister now earning his keep at Royal London, has called for the Government to rule out any changes in tax relief “at least for the rest of this parliament”. He sensibly argues that savers deserve a period of stability in which to save – rather than having to second guess all the time what the Government has up its pensions sleeve.