Zurich UK Life chief executive Gary Shaughnessy said the green paper was an opportunity to end “piecemeal change” and put pension tax relief on a sustainable long-term footing.

Zurich UK Life chief executive Gary Shaughnessy said the green paper was an opportunity to end “piecemeal change” and put pension tax relief on a sustainable long-term footing.

Assessment Task

Background

Below are a few of the many articles which reflect developments on this topic area:

Zurich UK Life chief executive Gary Shaughnessy said the green paper was an opportunity to end “piecemeal change” and put pension tax relief on a sustainable long-term footing. “Saving for a pension currently provides real tax benefits to individuals in reward for taking responsibility for their retirement savings and reducing the future financial pressure on the state. It’s important that real benefits remain in place for the majority as a result of this review. We would strongly encourage the government to ensure that any changes from the review provide much-needed simplicity to encourage people to save more.”

“Savers will be asked to give up billions of pounds of tax relief they have received on their retirement funds under a tax grab being prepared by the Government, the former minister for pensions predicts today.  Steve Webb, a prominent member of the coalition government until May, warns that people who have been “saving for decades” are the ultimate target of an inquiry announced two weeks ago. The Treasury is considering re-writing the tax rules on pensions that currently ensure savers are charged only when they withdraw the cash after age 55. In future, pensions could become almost identical to Isas – taxed up front rather than on withdrawal – albeit with a bonus to reward people for setting aside money for the long-term.”  (Morley & Hyde, 2015).

“George Osborne announces gradual reduction in tax-free limit on pension contributions from £40,000 a year to £10,000 for high earners “ (Batchelor, 2015).

“This Budget not only chipped away at the pension tax regime, but also suggested that the entire edifice might be pulled down and replaced. Pensions have become increasingly difficult to understand, especially for those in final salary schemes and higher earners. This Budget has added further traps for the unwary.” (Redston, 2015).

Required

  • In the light of the above articles, research developments in UK pensions over the last 5 years to identify some of the key issues which have faced the pensions industry and how, if at all, they have been dealt with. Your review should consider developments up to the current date, including the 2015 budgetary changes, latest developments/discussions on the green paper and focus attention on taxation rather than social points.                                                                                                                                                                                                                                                                                        40%    
  • Pensions were once thought of as a tax efficient method of investing for one’s retirement. Do you think that the tax advantages have been eroded?   You should consider all the current developments, particularly  the 2015 budgetary changes, and any alternative tax efficient methods to invest for one’s retirement available.                                                                                                                                                                                                                                                                                                                                                                                                                                                        30%                                                                                                                                                                            

Considering contemporary developments, critically evaluate if you think the steps the government are taking regarding the pensions industry are sufficient.  Your review should include recommendations to policy makers and points for further consideration to reduce the impact of the issues identified by the pensions industry.                                                                                                                                                                                                                         30%

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By | 2018-10-09T20:22:50+00:00 October 9th, 2018|Uncategorized|