Pension Freedom  

Actuaries call for pension freedoms extension

Actuaries call for pension freedoms extension

The Association of Consulting Actuaries is calling on the next government to extend pension freedoms to younger savers, as part of its manifesto for the December general election.

The professional body said the pension reforms introduced in 2015 should be accessed after 10 years of savings to a proportion of individuals’ pension funds, currently available only from age 55.

By accessing their pensions earlier, individuals could get help to fund house deposits or to meet a short and specific list of other eventualities, the ACA stated.

In June James Brokenshire, the then minister for housing, communities and local government, suggested first-time buyers should be able to use their pension pots to top up their savings for a house deposit.

The proposals caused a stir in the industry, with many experts unhappy about muddying a pension pot with a housing deposit.

The ACA’s manifesto includes also six other proposals, since the actuaries believe the public should be pre-advised of the parties’ broad approaches on how they propose to boost pensions and savings outcomes, and what major tax changes might be considered.

The actuaries are also asking for parties to commit to the social care reform, reaching out to identify both a cross-party consensus and long-term approach.

The professional body is calling for a “fresh boost” to auto-enrolment, including increasing minimum contribution rates and widening coverage during the next Parliament.

The actuaries are also asking for a significant simplification of the pension tax regime, “with clear policy goals and extensive consultations to minimise unintended consequences”.

It said: “We strongly urge that any measures are for the long term, properly thought through, and involve widespread consultations, so that best endeavours are made to smooth out the problems which have resulted from tweaks made in the regime in recent years.”

Other proposed measures include scrapping the triple lock and provide clarity over the proposed increases of the state pension age.

According to Jenny Condron, the ACA’s chairwoman, the public “have a right to expect transparency from their politicians in what they are planning in respect of policies towards savings, pensions and social care”

“Without this, how can anyone plan their finances for the longer-term?” she asked.

Ms Condron added: “We need our politicians to approach these matters with a view to seeking some greater stability and long-term thinking over the various pensions, savings, social care and tax regimes and – ideally – with a desire to identify some consensus across the parties akin to that enjoyed in respect of the pensions auto-enrolment policy over the last decade.”

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