SNP urges pension review as reforms dubbed dangerous
The SNP has demanded the government launch an independent review of pensions policy after the former pensions minister attacked reforms to savings as “dangerous”.
The nationalists said they were concerned about proposals for a Lifetime ISA, which they claimed would undermine the principle of tax-free workplace pensions paid into by employers.
SNP pensions spokesman Ian Blackford MP called the plans a “con trick” and insisted Theresa May had downgraded pensions by passing the portfolio to a junior minister. Pensions expert Baroness Ros Altmann, the former minister under David Cameron, yesterday gave a scathing interview to Russia Today, saying pensions policy had been driven by “short-termism” with important information about the rise in retirement ages downplayed.
Baroness Altmann said her time in government had been “terrible”, claiming: “It makes The Thick Of It look like a playground”. She had previously warned that making ISAs part of the pensions system could lead to “millions of poor pensioners”. In May’s cabinet reshuffle, she was replaced by Richard Harrington, a Parliamentary Under Secretary of State at the Department of Work and Pensions.
Announced by the former Chancellor George Osborne last year, the Lifetime ISA will allow savers under the age of 40 to put aside up to £4,000 per year, supplemented by a bonus of £1,000 from the government up to the age of 50. In total, savers will be eligible for up to £32,000 in top-up payments.
Savings are tax-free and can be held in addition to a standard ISA. If used to supplement pension income, funds could not be accessed until age 60. But there is concern that pensioners putting money into a Lifetime ISA rather than a workplace pension could draw down their savings too quickly, leaving them without an income into their 70s and 80s. They are due to be introduced next year.
“The SNP raised concerns about the Lifetime ISA as soon as it was announced – it undermines pension savings and is a gimmick designed to promote ISA savings from taxed income,” Blackford said. He said it was “disappointing” that Baroness Altmann did not do more to raise concerns about the possible dangers of Lifetime ISAs while in government but welcomed the fact that she shared the SNP’s “deep concerns about Tory attempts to muddy the waters when it comes to pensions”.
Blackford said: “We need no more con tricks from the UK government on pensions – Theresa May has downgraded the pensions brief and the independent review into state pensions increases will only scratch the surface of UK pensions. “We need urgent action on pensions and a full, independent commission to investigate everything from auto-enrolment to the latest pension reforms.”
A spokeswoman for the DWP would not comment on Baroness Altmann’s interview.
Read the original story on the Scotsman website.