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Former Pensions Minister praises AE and pensions freedoms, but dismisses Tapered Annual Allowance

Quantum Advisory were joined by a record number of attendees from South Wales and the South West for its latest “Pensions for Breakfast” seminar starring former Pensions Minister Sir Steve Webb.

Now Director of Policy and External Communications at Royal London, Sir Steve provided plenty of anecdotal insights into his time behind the scenes of David Cameron’s government and gave his thoughts on a variety of pensions issues, including the current Defined Benefit (DB) funding scheme and proposed Collective Defined Contribution (CDC).

Discussing if he were to rewrite the forthcoming Pensions Bill, Sir Steve explained his four priorities would be legislation to assist the consolidation of the DB market, further focus on the Pensions Dashboard, emphasis on getting CDC schemes up and running and promoting the New State Pension, which is designed to be simpler and give people a flat rate amount so they know what amount to expect Sir Steve also highlighted other ‘pensions positives’ including Pensions Freedoms and choice for people to decide what to do with their funds in retirement and Automatic Enrolment, which has introduced 10m people to pension saving for the first time.
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Downsides of pensions reforms include, in his opinion, Tapered Annual Allowance which he describes as ‘the worst piece of pensions policy’.

In relation to Pensions Freedoms, Sir Steve said: “Ironically, the thing that has gone wrong with pensions freedoms is not buying Lamborghinis, but reckless caution with accessed funds being invested in low returning investments that do not even keep up with inflation”.

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Stuart Price, Partner and Actuary at Quantum Advisory, said of the event: “Sir Steve’s talk was so engaging and all the delegates had a thoroughly enjoyable time. In addition to the pensions aspect it was great to see the networking before and after the talk.”

The next Pensions for Breakfast seminar will take place 13 November.

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