Government departments pursuing 'fundamentally opposed' policies on pensions
In its submission to the DWP’s review of state pension ages, Hargreaves Lansdown has warned of policy conflict between departments on pensions and ageing.
- Submission to Cridland Review warns of interdepartmental policy conflict
- DWP and HMT pulling in opposite directions
- State pension, private pensions and broader social needs all have to work together
The DWP review of the state pension system, led by John Cridland CBE was launched in October 2016 and closed on 31 December you can find more information here.
Tom McPhail, Head of retirement policy:
"The DWP and the Treasury seem to be developing fundamentally contradictory expectations of the pensions system. It isn’t possible to have a system which both serves the needs of flexible later-life employment patterns, and at the same time imposes ever more complications and restrictions on the individual investor. There is also a worrying blind-spot, with the bulk of recent tax restrictions falling on individual defined contribution investors, in spite of the fact that around three quarters of pensions tax relief is in respect of final salary pension schemes."
"The Chancellor Philip Hammond has spoken recently of the need to look at household saving, of structural issues and the distorting effect of the housing market. The Cridland review should be part of this overall effort to reconcile these contradictions and to explore the potential for joined-up policy-making. Ultimately the UK’s pension system must meet the needs of individual savers and investors as well as delivering good value to taxpayers."
Hargreaves Lansdown’s key recommendations to the Cridland review are:
- Interdepartmental cooperation to ensure consistent pension policy-making
- Focus on better engagement to help individuals plan their state and private pensions
- Helping the self-employed to meet their retirement needs
- A simple, fair state pension which rewards private saving
- Transition away from the Triple Lock