The National Association of Pension Funds (NAPF) has today (Wednesday) responded to draft clauses to the Taxation of Pensions Bill. The draft legislation sets out the proposed changes to the pensions tax rules announced at Budget 2014 that will give individuals greater flexibility to access their pension savings.
Commenting Graham Vidler, Director of External Affairs, NAPF, said: “The key to making these reforms to pensions taxation a success is keeping them as simple as possible for pension savers to understand and for schemes to implement. Pension schemes will need to clearly explain the new choices open to members.
“But even with the help of guidance, many scheme members will find the options available to them from age 55 baffling and will struggle to select an appropriate mechanism for turning their pot into an income. 30% of respondents to our 2014 Spring Workplace Survey said they did not feel capable of deciding what to do with their pension savings and even less (14%) felt they would need no guidance at all on what to do with their savings.
“We would urge the Treasury and guidance guarantee providers to work with the NAPF to develop simpler ways of communicating the complex options for members.”
Graham Vidler added: “Pension schemes can potentially help their members decide how best to access their pension savings by using their expertise to highlight options that are good value. Schemes sifting the market and nudging members towards sensible decumulation strategies will help unengaged pension savers take advantage of the freedoms and choices being offered by the Government. This is a development that should be encouraged by Government within schemes that have robust governance arrangements that ensure they are acting in their members’ interests.”
Read the NAPF’s full response to draft guidance on clauses for the Taxation of Pensions Bill.
Notes to editors:
The NAPF is the voice of workplace pensions in the UK. We speak for over 1,300 pension schemes that provide pensions for over 17 million people and have more than £900 billion of assets. We also have 400 members from businesses supporting the pensions sector.
We aim to help everyone get more out of their retirement savings. To do this we promote policies that add value for savers, challenge regulation where it adds more cost than benefit and spread best practice among our members.
Lucy Grubb, Head of Media and PR, NAPF, 020 7601 1726 or 07713 073023, [email protected]
Eleanor Bennett, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]