Personal Pension  

Altmann on her hopes and fears for pensions post-Brexit

Altmann on her hopes and fears for pensions post-Brexit

The pensions minister is confident she can still get on with “making good policy” for pensions post-Brexit.

Before it became clear the UK had voted to leave the European Union, Baroness Ros Altmann warned pensions could be under threat from upcoming “economic turmoil”.

Speaking at an event in London this week, she still expressed concern over the fact that anything which damages the economy poses a risk to pensions.

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“Good pensions depend on a good economy. Markets don’t like uncertainty, and we are clearly in unchartered territory,” stated Ms Altmann.

“I hope we will get the political turmoil settled soon and do what we really need to be doing -which is making good policy for everyone in the country - who hopefully one day will be a pensioner if they aren’t one already.”

She added increasing anxiousness that short-term politics should not undermine long-term pensions policy.

“We must not lose sight of the fact that there is a long-term need for pensions. Future generations are going to need good pensions, but of course anything that damages the economy is a risk.”

FTAdviser sister newspaper Financial Adviser reported retirement income experts fear that pension freedoms could unravel as a result of the Brexit.

AJ Bell’s senior analyst Tom Selby pointed out recent changes to the treatment of pensions on death – allowing savings to be passed on tax-free when someone dies before 75, and taxed at the recipient’s marginal rate post-75 – may look generous in a post-EU vote world.

Alan Solomons, director of London-based Alpha Investments & Financial Planning, was also concerned that the long term repercussions of Brexit could change the face of the industry.

“Brexit in the short-term is a negative,” he stated. “Long-term, the country cannot afford state pensions not in the way they are giving tax relief, I think that will change in the not too distant future.

“Auto-enrolment will become compulsory - ultimately state pensions will be phased out - no adjustments for people under certain ages. People will have to rely on what they’ve saved in auto-enrolment; this may lead to compulsory annuitisation through auto-enrolment.”