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Pensioners should ‘stay in bed’?

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26/02/2015
 Retirees itching to redeem their pension funds should “stay in bed” when the pension reforms come into force in April, according to pensions minister Steve Webb.

Speaking at a conference yesterday, Webb said retirees should “take their time” with their pensions, as the repercussions of hasty action could be long-term and severe.
As reported by Your Money, director general of the ABI Huw Evans urged imminent retirees not to feel “rushed into making quick decisions” – echoing his remarks, Webb said 6 April was not a “deadline”.

Webb also voiced concern that many retirees would be blocked from accessing their funds due to exit penalties, which could run to thousands of pounds. He called such fees “a stain” on the pensions industry, and pledged to name and shame firms that failed to help consumers ensnared by poor policies.

At the same conference Mark Hoban, former financial secretary to the Treasury, stated that tax breaks afforded to high-earning pensioners should be reduced. He endorsed Webb’s earlier proposals to offer a flat rate of tax relief at £1 for every £2 invested. Hoban believes such a policy would provide “savings” if it replaced the current model, where savers get full income tax relief on pension contributions up to 45 per cent.

 

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