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TISA comments on the Chancellor’s Spring Statement and the impact on pension outcomes

March 23, 2022

Commenting on the Chancellor’s Spring Statement and the impact on pension outcomes, by Renny Biggins, Head of Retirement, TISA UK

“The pensions industry has been facing an unprecedented amount of change in recent years. Significant further measures are planned for implementation, including Pensions Dashboards, the DWP decumulation review, the FCA pensions consumer journey and Value for Money responses due in the coming months.

“If industry professionals are finding it hard to keep up with change, there is no chance the typical consumer is. These are well intentioned regulatory measures but we need to pause for breath.

Consumers need consistency, especially around the fundamental principles relating to tax benefits and thresholds – these are key incentives for saving into a pension. This will, over time, aid consumer understanding and build confidence and trust. 

“At TISA, we therefore welcome the news that the Spring Statement did not include any pension related changes.

However, over the longer-term, we need to see a more holistic view of retirement saving emerge. 

“One proposal we believe would be effective is a long-term savings commission, which would have the potential resource and scope to take a broader view. Such a commission could depoliticise savings decisions with an objective (in collaboration with industry) of creating a more stable savings framework which promotes consumer trust, understanding and good outcomes. 

“We are also concerned that the OBR has revised its forecast for tax take from over-55s drawing on pensions to £1.7billion, up on £400million in 2020-21 and £500million forecast in October. This is likely an effect of the pandemic and the cost-of-living crisis. 

If over-55s are increasingly accessing pension funds to meet an immediate shortfall in income, this is likely to have a detrimental effect on their living standards in later life. The take-up of guidance or advice is essential in helping people understand the impacts down the line of decisions that are made now.