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Press comment: Pensions ISA 'disaster'

20/04/2016

Adrian Walker comments following Baroness Altmann's speech at the Association of British Insurers’ Transforming Long-Term Savings conference in London on April 19. The Pensions Minister stated that “turning pensions into ISAs would be a disaster.”

Adrian Walker, retirement planning manager at Old Mutual Wealth:

“The Lifetime ISA, recently announced by the Chancellor in his Budget, has been seen by many as the prototype for to a full-blown ‘Pension ISA’. But the fact that we appear to have two members of the same party of Government on a collision course over the future direction of pensions taxation states to me that it is now increasingly less likely the prototype will become the final product.

“Making contributions to a Pension ISA, after income tax and National Insurance is taken, would bring forward billions of pounds in tax revenue for the Government but it would also threaten to undermine years of work to improve the image of long term saving through  pension schemes via initiatives such as auto-enrolment. The Government’s consultation on pension tax relief was entitled ‘Strengthening the Incentive to Save’, however the Lifetime ISA, as it stands, looks attractive only in the main for anyone under 40 who is saving for a house. Beyond that, apart from tax planning by higher net worth individuals and their families, I cannot see funds saved within an ISA-style environment remaining invested for 20-30 years to fund future retirement income.

“Savers and the pensions industry want to see government make a cross-party commitment to a long-term, sustainable pension saving system. There has been widespread political support for pension freedom reforms that change the way people take pension income, now we need the same certainty in the way we save into those pensions. The Chancellor is believed to be in favour of major reform and that presents something of a sword of Damocles for the industry and for pension savers. While the Pensions Minister has expressed her concern about a pension ISA, we really need the same guidance from the Chancellor to end the current uncertainty.“

For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145 076tim.skelton-smith@omwealth.com

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.1 billion in customer investments (as at 30 September 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• The private client advisers business is now Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

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