BeeHive > BeeLines > 2009 > December > The Week of the PBR
The Week of the PBR
Well, what with the Pre-Budget Report due out on Wednesday and everything and with the Never-Ending Pensions Tour still in full swing as the year ends it looks like this is going to be another busy week here at the BeeHive. No matter, I’m sort of used to that, but it will be a strange week for me too I guess. I don’t know if you’ve heard about it already from reading the pension press or not, but I’ll be moving on from Scottish Life at the beginning of next year to get involved in a new pensions business. Ms Bruun will be joining me in that venture and last Friday left Scottish Life, and therefore the BeeHive, for the last time.
I know many of you will join me in thanking Bolette for all the work she has done over the nearly ten years that the BeeHive has been running. She has been the main researcher for the site for all that time and as part of that has tirelessly trawled through each and every day’s Hansard proceedings to find all the pension bits for your enlightenment and amusement and, I think, provided the BeeHive with one of its unique features in the process. I know many of you have valued her hard work and that’s been evident in the many e-mails sent in over the years; in fact Ms Bruun’s inbox was often more full than yours truly’s, which I suppose says it all.
She’ll be watching closely from the sidelines to see how I get on without her help in the coming weeks as I come to the end of my time here, not least this week with the PBR on the horizon. Hopefully I’ll do OK.
On that subject, if you ask me in advance what would I like to see about pensions in the PBR this year, or any year come to that, I’d say “Nothing.”
We've already got the most complex pension system on the planet and quite frankly the last thing we need is further tinkering. I personally feel that our pension system in the UK is fast approaching its very own 'straw that broke the camel's back' moment. Having said that, though, I find myself this year hoping that pension changes will be made in next year's Budget.
Having a pension system that is almost impossible for people to properly understand is bad enough, but having a system that acts against savers is even worse. A system that has both attributes is about as anti-Panglossian as it gets; and that's what I think we've got.
When people save for the future in a pension they are doing the right thing by themselves and by the rest of us. We need a pension system that does right by people who do the right thing when they defer income for later in life.
At the moment some modest earners who do the right thing and save in a pension take the risk that they may one day become entitled to means-tested support in retirement and that entitlement would have the unfortunate effect of devaluing their pension savings. The PBR should propose an increase of the triviality limit from 1% of the Lifetime Allowance to 4% so that people who find at retirement that their modest levels of pension savings weren't worth making could get their money back.
When people defer income for later in life by saving in a pension they defer the date they pay the tax on that income too. The deal is we only pay tax on our income once. Some higher earners these days are now faced with the opportunity to pay tax twice if they defer income by saving in a pension. The PBR should undo this.
We deserve a pension system that treats us all the same, whatever we earn. The pension system should do the right thing by people who do the right thing by themselves and by the rest of us.
That’s what I think anyway. Let’s see what comes out on Wednesday…
8 December 2009
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