The Government should remove pensions altogether and replace them with a single tax efficient savings product, says pensions expert Steve Bee.
Bee, who is CEO and founder of employee benefits platform Jargonfree Benefits, welcomes George Osborne’s plans to give savers greater freedom to make their own decisions about their pension savings, but argues the reforms do not go far enough. He wants to see savings and investments rolled into a longer-term product aimed at producing retirement income or covering long-term care costs.
He argues that savers would benefit from a combined pension and Isa savings pot which benefits from the power of auto-enrolment at work and contributions from employers.
Bee says: “Why should people decide at the point of saving that the savings are going to be either short to medium-term or long-term? When somebody starts to put money aside for the future and they are asked, “Is this money for buying a car or a holiday or is it for when you are retired?” they should be able to say, “I don’t know yet. I’ll decide later.
“If we can trust people to manage their own financial affairs when they are pensioners we should also be able to trust them while they are savers. A tax efficient savings vehicle could supersede the existing pension system, and render the whole concept of silo-based products completely unnecessary.”