Jeff Prestridge

When will George Osborne stop tinkering with pensions?

Sooner rather than later, George Osborne is going to have to come clean and tell us what he really wants to do with our pensions – the financial vehicles we and our employers painstakingly fund and that in theory should help us live out our retirement in a modicum of comfort.

Will it be yet more tinkering as befits a Chancellor who has become known as the ‘Tinker Man of Pensions’ – the Government’s own version of footballing Tinker Man extraordinaire Claudio Ranieri ? Another restriction here and another rule change there.

Or far more audaciously, will it be a radical overhaul of the tax incentives available to those who squirrel away money today so that they can enjoy a better tomorrow? We wait with baited breath for the Pensions Tinker Man to declare his hand.

He has certainly been cogitating awhile, far longer than Loyd ‘we’ve deliberated, cogitated and digested’ Grossman ever did on MasterChef in the 1990s. But then let’s cut Osborne some slack – after all, he has had other pressing issues (besmirching the Brexiteers) on his mind.

The fact is, nearly a year has now lapsed since Osborne oversaw the publication of a consultation document on the tax incentives available to those who save into a pension.

Mischievously entitled ‘strengthening the incentive to save: a consultation on pensions tax relief’, it seemed to pave the way for a dismantling of the current regime. One that currently provides high earners the greatest tax breaks to help build a retirement fund which will keep the bailiffs from the front door in later life – and one that costs the Government upwards of £20billion a year (in terms of the net cost of tax relief) to maintain.

As Osborne said in the foreword to the consultation: ‘If people are to take responsibility for their retirement, it is important that the support on offer from the government is simple and transparent, and that complexity does not undermine the incentive for individuals to save.’

Although we were led to believe at one stage that Mr Osborne would outline his preferred direction of travel on pensions in his March Budget earlier this year, he backed off at the last moment, claiming that the economic backdrop was too precarious for any radical overhaul to be introduced.

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