Ken Davy: Pension tax change would help savers and Treasury

The government’s consultation on pensions’ tax relief, which ends this month, could be the last opportunity for us to create a robust, yet simple, pensions framework, that encourages saving for retirement without bankrupting the Treasury.

There are already suggestions that Isas and pensions savings should be linked together. Though simplistic in theory, I believe this could create a nightmare of increased complexity as the years progress and, while Isas are tax-efficient, they do nothing to incentivise or encourage long-term savings. Pension funds, on the other hand, can only be accessed from the age of 55 and, as this early-access option is just months old, it is too premature to predict the impact it will have on the long-term living standards of the elderly. As it stands, my hunch is that the long-term result of early access to pension funds will be negative.

To read Ken's article in full, please click here 

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