“Especially with the pensions dashboard being ever increasingly delayed and watered down.”
Elsewhere, others argued that the Autumn Statement offers a second bite of the pensions cherry following the King's Speech.
Iain McLellan, head of research and development at Isio, said its like that several of the government’s pensions policy threads may be stalled for a while, particularly those in the defined contribution market.
“It looks like the value for money framework and the requirement for DC schemes to offer decumulation services will have to wait,” he said.
“As will plans to resolve the small pension pots problem.
“On the other hand, we’ll have a second bite at the cherry at the upcoming Autumn Statement from the chancellor.
“There, we expect the lifetime allowance to be fully removed and maybe, just maybe, we’ll see the tax charge applied when surpluses are returned from DB schemes to their sponsors reduced.”
He explained that given the corporation tax rate stands at 25 per cent, there’s scope to make tax on surpluses – currently charged at 35 per cent – a little less onerous.
“A less punitive rate might help to nudge schemes towards more investment in growth assets as surpluses arising as a result would not be taxed quite so hard,” he said.
“While it may be disappointing to see no Pensions Bill among His Majesty’s announcements today, that doesn’t mean that pensions reform will grind to a halt. Far from it.”
sonia.rach@ft.com
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