Labour reforms

There is a theme developing when it comes to UK pension legislation and that is the certainty of uncertainty. It was only in April this year that Chancellor George Osborne announced the ‘pension shake up’ that allowed pensioners unlimited access to their own pension savings. From the age of 55, UK private pension holders would be allowed access to 25% of their pension fund tax free, with the remainder drawn under their marginal rate of tax. With the next election just eight months away, senior members of the labour party including John McTernan political secretary to former PM Tony Blair, have criticised the reforms in the press claiming the changes benefit the richer members of society and harm the weakest. “Labour should oppose this disaster in every way shape or form they can, it is what I have advised them to do and will continue to do so.” John McTernan. Talk of a reverse on reforms will have insurers seriously considering the political risks involved and will no doubt be igniting panic in boardrooms throughout the UK. David Howell, CEO of Guardian Wealth Management says, “reversing the policy would cause a huge uproar in the industry. Clients are well aware of the changes due to intense coverage in the press; a lot of planning is now in place preparing for the changes in April. If elected, were the Labour government to reverse the proposed changes, there would be a cost incurred by many clients who have already paid considerable fees for advice. They would then have to pay again to revise those plans and adapt to further changes in legislation. The changes set by the chancellor were positive for both clients and the industry, to reverse them would in my opinion hinder Labour government’s chances of election, and cause mayhem in the financial industry.” With the next election on the horizon it would certainly be a brave move for labour to reverse the impending legislation on UK pensions; it looks like one thing is for sure, pensioners in the UK need to hold their nerve for a while longer.

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