TUC General Secretary Frances O’Grady has commented today (Thursday) on the changes to pensions announced in the Budget yesterday she said:
“Pulling big announcements out of the Budget hat is not the way to make pensions policy, and breaks with the real efforts to build consensus by both the previous government and this one – at least until yesterday’s budget.
“Some of the Chancellor’s changes, such as increasing the size of small pension pots that can be taken as cash lump sums, make sense and were already well supported by those interested in pensions.
“But the main thrust of the Chancellor’s policy goes against what most people want from the pension system – a decent income in retirement. As no-one can know how long they will live, this is best achieved by sharing risk in collectively organised pension schemes.
“The Chancellor is now going in the opposite direction by turning pensions into individual savings schemes, complete with big tax breaks for the better off. We need more collective provision, not to go back to the bad old days of the 1980s when the government had similar slogans of choice and individual responsibility. Those were fine words but led to a collapse in pensions saving only now being put right through auto-enrolment.
“Annuities are a broken product, but we are throwing the risk-sharing baby out with the broken market bathwater.”