What would you ask pensions minister Richard Harrington?

Former_MSE_Andrea

What's happening?

We're talking to pensions minister Richard Harrington next week. Do you have a question for him?

If you do reply below and we'll try to put yours to him. We're asking on Facebook and Twitter too (links are in my signature) so we may not get through all but we'll do our best.

Related on MSE:

Pension Need to Knows
How to Start Saving

dunstonh

As an IFA and with over 20 years experience, I think the mainstream market for pensions has never been better for consumers. Certainly the odd issue here and there but the biggest issue are the rogue companies (often unregulated) selling SIPPs with unregulated investments that inevitably fail. This is not something new yet the FCA appear powerless or unwilling to act.

I phoned the FCA recently about a cold calling pension review firm that just had an FOS decision against it for a client I was helping who had bad advice on their pension and it used the unregulated investments in a SIPP. The firm were not FAs or IFAs and had no investment regulatory permissions. They were just mortgage advisers and should not have done the transaction. The firm are trying to wind up before they pay compensation to the client that the FOS have awarded. The FOS cannot do any more as they have no remit beyond saying that the firm should pay compensation. Companies house shows a court order for winding up in July. Yet they still have their FCA permissions to give mortgage advice and can still trade (and mis-sell as the FOS publications show that this was not the only complaint in the same area). When I phoned the FCA to discuss it with them, there was no interest shown at all and the person didnt want to know. I was told that until they are told otherwise, they can keep their permissions.

I know you cannot comment on individual cases but what does it say about a regulator that is not interested in taking information and investigating a cold calling pension review company that is acting outside of its regulatory permissions, has a court order for winding up but is still trading and is ignoring an ombudsman decision in the hope of not paying before it is wound up?

To me that is a regulator that is failing the consumer and is too focused on micromanaging things that are insignificant.

Triumph13

Does the idea of a Lifetime Allowance (LTA) still make any sense? There are clear reasons why we need an annual limit on contributions and also a limit on the total tax free lump sum that can be taken, but after that doesn't the LTA just cause more problems than it solves - particularly with the large numbers of doctors and other key workers feeling they are being forced into early retirement to avoid punitive tax charges?
If you replaced the LTA with a limit on the tax free lump sum then the higher rate tax band in retirement would form a natural barrier against excessive contributions without the risk of punitive tax rates if your pension investments perform better than expected.

marlot

Triumph13 wrote: »

...the large numbers of doctors and other key workers feeling they are being forced into early retirement to avoid punitive tax charges?

I agree, I know two GPs and several mid-senior civil servants who are retiring at 55 - not because they particularly want to, but because the only way they can stay below the LTA is by taking their pensions early.

A number of them are likely to reappear as contractors - at a much higher cost to the taxpayer!

We need to abolish the LTA as soon as possible. It's largely obsolete now that there are reduced annual limits in place.

EdSwippet

Why is there a massive disparity between the way the pensions lifetime allowance is applied to defined benefits pension schemes -- such as those available to MPs and civil servants -- and to defined contributions schemes available to the rest of us?

The 20x multiplier allows MPs and civil servants to draw £50,000/year before hitting the punitive tax rate applied on exceeding the £1MM lifetime allowance. In contrast, defined contribution savers would be hard pressed to find an annuity paying £26,000/year for a pension pot valued at the current £1MM lifetime allowance.

LHW99

It would help with the care fees issue if money saved in a personal pension could be transferred directly into an immediate care needs annuity, as it can into a standard (impaired life) annuity, without 75% being subject to taxation.

madeinireland_2

marlot wrote: »

I agree, I know two GPs and several mid-senior civil servants who are retiring at 55 - not because they particularly want to, but because the only way they can stay below the LTA is by taking their pensions early.

A number of them are likely to reappear as contractors - at a much higher cost to the taxpayer!

We need to abolish the LTA as soon as possible. It's largely obsolete now that there are reduced annual limits in place.

I agree also. I will be aiming to retire in next few months for the simple reason that I am at the lifetime limit and nowhere to go. May as well take it easy.

JoeCrystal

Well, my question would be that are there any thoughts on increasing the auto enrolment contribution for the employer much higher than derisory 3% by April 2019 or introduce compulsory employer matching over 3% to fixed percentage? At the moment, my employer is paying in miserable 1% because they was legally have to so. Considering how we are meant to be saving up for retirement in a DC pensions, such a low level of the employer's contribution at 1% to 3% is virtually useless.

EdSwippet

Over the past six years it has become clear that all pensions decisions are now made by Treasury, and furthermore that Treasury believes that there is no policy, manifesto promise, or benefit that cannot be paid for by further squeezing pension savers. There has been at least one negative change each year since the Labour government left office, and in some years two or three, typically in the form of reduced allowances -- the lifetime allowance is now less than 50% of its previous value in real terms, and the annual allowance is a mere shadow of its previous value, at between just 20% and (for some) under 4%.

At each turn, your predecessor Ros Altmann and her predecessor Steve Webb at the DWP have voiced concern or complaint, and at each they have simply been ignored by Treasury. During the recent reshuffle the post of Pensions Minister was effectively demoted within government.

Given this backdrop, what would you say to someone who takes the view that the role of Pensions Minister is now simply that of "human shield", with no function other than to absorb bullets on behalf of the government whenever Treasury unleashes ill thought-out and poorly conceived pensions-hostile policies?

chiefie

To help people cope with the ever increasing state pension age would the government allow early, but reduced, access to the state pension for those who would in doing so not require other benefit payments ?

colsten

I think we need more education and public awareness about the need to start as early as possible with saving for later life.

We also need more employers who are willing to employ people at least up to their state pension age, on flexible work arrangements (i.e. including part-time jobs).

Does Mr. Harrington agree, and if so, what is he doing about it?