You are here: Home - Retirement -

Labour backs ‘radical’ pension reforms but demands more detail

0
Written by:
24/03/2014
Labour has backed the Chancellor's move to radically overhaul the pension system, which will give retirees freedom to do what they want with their money at age 55.

However, the BBC reports shadow work and pensions secretary Rachel Reeves demanded greater detail on the plans – which were described as the biggest pensions shake-up in a hundred years.

Pensions formed a massive part of George Osborne’s fifth Budget. The Chancellor said many current restrictions would first be relaxed and then scrapped to give savers more control.

Anyone aged over 55 who has saved into a defined contribution pension scheme will be able to take their full pot as a lump sum, subject to tax, to invest or spend as they like, the report said.

Reeves told BBC Radio 4’s Any Questions the current annuity market was not working well for people who “have saved all their lives”.

She said: “I support reform and I support what has been announced this week, although we need to see a lot more detail about what that will mean in practice.”

Labour wants the government consultation to investigate whether the move actually helps lower and middle income workers, whether people who still want to buy an annuity will be able to and greater detail on the advice for all pledge.

Reeves also continued the party’s call for wider reform on pension charges and providers’ fees.

She also said she believed most people would not choose to draw down their full pension, the report said.

Meanwhile, the secretary of state for work and pensions, Iain Duncan Smith said the Budget was “one of the greatest” ever delivered and would make sure people “who have actually tired hard will get rewarded”, the BBC reports.

He backed Osborne’s move to allow people to spend their pensions in their own way, rather than the majority being left with few options other than buying an annuity.

Duncan Smith told Sky News people would not blow their savings.

“What they will actually do is to go out and find some (investment) vehicle to give them better returns than their annuities,” he said.

Strong market remains

However, all is not lost for the annuity market, according to Liberal Democrat chief secretary to the Treasury Danny Alexander.

He told the BBC’s Andrew Marr said: “I think a lot of people will [still] want to buy annuities. There’s still a very strong market there… This will also help to make the annuity market more competitive.”

Related Posts

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Insurance Experts: Are you fully insured? Click here to get a quote.

For a free quote or to speak with an insurance expert call 0800 1218744

Retirees fail to claim £3.5bn pension credit: check if you’re entitled

Four out of 10 retirees who are entitled to receive pension credit failed to claim the benefit, missing out on...
Retirees fail to claim £3.5bn pension credit: check if you’re entitled

29 savings accounts beat inflation, but most people won’t switch

A total of 29 accounts now match or beat inflation, but the majority of savers will stick with a poor paying d...
29 savings accounts beat inflation, but most people won’t switch

What happens to your credit score when you move overseas?

When you move abroad – whether permanently, or temporarily for an extended period – one thing that won’t be tr...
What happens to your credit score when you move overseas?

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
More than 17,000 snap up home under Help to Buy

More than 17,000 people have bought a new home using the government's Help to Buy scheme, figures have revealed.

Close