The 5 Issues Pensions Minister Guy Opperman MUST Fix in 2020
Issue #1 – Make progress with the Pension Dashboard
Mr. Opperman needs to push regulators and pension companies – all providers and types of pensions – to make real progress with this in 2020.
The pensions dashboard from the Money & Pensions Service (MaPS) will allow people to check pension savings in one central online place – hugely useful.
There is no reason why this Pensions Dashboard shouldn’t be up and running this year – and it doesn’t have to be 100% complete before this happens.
Issue #2 – Create a standard template to share information digitally
Part of the problem with the first issue is that information sharing between pension companies isn’t standardised. This should be relatively straightforward to do with potential early gains.
Sharing information digitally should be a requirement.
Even in 2019, some providers insist on ‘wet’ signatures and only communicate by post! Digital signatures are perfectly acceptable – and Opperman needs to approve the templates to make this happen now.
Issue #3 – Simplify and protect those on lower incomes
There’s no need to have both “Net pay” and “Relief at source” HMRC schemes. If you make all schemes relief-at-source then the lowest income savers are straightforwardly rewarded with a tax rebate.
Better sharing of information with HMRC should mean higher rate payers automatically receive the extra rebate too, though this will take time to work through the system.
Issue #4 – Be clearer on NI credits for Child Benefit
Thousands of people, mostly women, miss out on valuable NI credits because they don’t claim for child benefit due to the high-income child benefit tax charge introduced by the Government in 2013.
All mothers should be entitled to child benefit so they don’t have to claim.
Issue #5 – Please admit auto-enrolment isn’t right for everyone
Saving into a pension doesn’t improve your financial wellbeing if you’re paying off debt or saving for a property deposit.
If you save up to £4,000 a year (until you’re 50) the government will add a 25% top-up through the Lifetime ISA scheme (LISA), up to a maximum of £1,000 per year.
Ideally, some could save via both schemes – but remember too that the higher tax relief for higher ratepayers is better with a pension than a LISA.