HM Treasury appear to be at it with the scaremongering again.
With less than two months to go until the Autumn Statement on 4th December 2013, there is more speculation that we could experience cuts to pension tax-free cash and perhaps even an overall limit on ISA savings.
According to a report in the Sunday Telegraph yesterday, Treasury officials have been exploring the impact of a £100,000 ISA cap. This is to address concerns about ‘ISA millionaires’.
Despite the fact that only 2% of investors have investment ISAs valued at £100,000 or more, this is clearly a serious enough problem to keep Treasury officials awake at night and pondering solutions.
They also appear to have spent some time this summer gauging opinion on the impact of reducing the maximum pension tax-free cash from 25% to 20% of the value of the pension fund.
This is the maximum amount of tax-free cash you can withdraw from your pension once you have reached your 55th birthday.
An alternative proposal was to cap the maximum amount of tax-free cash taken as a monetary amount.
HM Treasury need to stop with this scaremongering.
Uncertain pension policy is one reason why investors fail to take personal responsibility for their financial futures.
We have previously advocated the creation of an independent Pension Policy Committee, with a mandate similar to the Bank of England Monetary Policy Committee.
Moving pensions policy away from political interference would give it much needed stability and hopefully encourage more people to save, fewer to rely on the State in their old age; surely this should be the aim of any government?
