But others said he was right to protect existing reliefs, and that radical reforms would have created new risks and imposed new administrative burdens on employers.
Former Liberal Democrat pensions minister Steve Webb, who now works in the pensions industry, said Mr Osborne had been right to resist changes. He called for a "period of stability" in pensions policy in the interest of encouraging people to save for the long term Conservative MP Mark Garnier, who sits on the Treasury select committee, acknowledged that the present system "massively favours those people who are earning more money" and told Today he favoured "a fundamental rehash of the pension system".
However, he said a flat rate relief would have been "quite difficult to administer" and more thought should be given to what reforms would work best.
Do your employees know how much income they will need in retirement? 3 March 2016
An article from WEALTH at work highlights the importance of reviewing how much income will be needed in retirement to have a better understanding about what to save now.
The article talks about it being very important for employees to save towards retirement and that many are not saving enough, however it highlights that some may not need as much as they think.
“ For some individuals once they retire, they will be paying significantly less income tax, have no National Insurance (NI) or pension contributions to make, mortgages and loans may be paid off, and children could be financially independent. Some may actually achieve the same disposable income levels in retirement or at least similar, even if their pension income is for example, half what their salary was when they were working.”
Two examples are given (for demonstrative purposes only, based on an active individual with no health issues, contributing towards their pension through salary sacrifice for tax year 2015/16):
Example 1 Mark has a salary of £26,000 p.a. and is making a 5% pension contribution towards his final salary (defined benefit) scheme. He plans to have paid off his £6,000 p.a. mortgage and £2,400 p.a. loans by the time he stops working. When he does retire, he will also no longer have to pay £2,820 Income Tax, £1,997 National Insurance or £1,300 into his Pension. Therefore, to have the same amount of disposable income as he had when he was working (£11,483), Mark needs an annual pension income of £11,704, leaving a disposable income of £11,483 after tax. Example 2 Joanne has a salary of £40,000 p.a. and is making a 10% contribution towards her pension. By the time she retires she intends to have paid off her mortgage of £10,000 p.a. She will also no longer have to pay £5,080 Income Tax, £3,353 National Insurance and £4,000 into her Pension. Therefore, to have a similar amount of disposable income she had when she was working (£17,567) she needs an annual pension income of only £19,309, leaving a disposal income of £17,567 p.a. after tax.
Read the full article from WEALTH at work .
Women have barely half the pension savings of men 8 March 2016
According to a new TUC sponsored report, women have barely half the pension savings of men.
The study, carried out by the Pensions Policy Institute, shows that women have, on average, £7,500 in savings in defined contribution schemes, compared to £14,500 for men. And women typically have £32,000 in pension savings in defined benefit schemes, whereas men have £62,900. The report The Under-pensioned 2016 , co-sponsored by the TUC, Age UK, the Joseph Rowntree Foundation and The People’s Pension reveals large pension disadvantages for women, ethnic minority workers, carers and the self-employed.
The findings show:
CIPP Policy News Journal
25/04/2016, Page 385 of 453
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