Labour proposes review of pension freedoms
17 November 2014
The government will have to review the pension flexibilities introduced in the Taxation of Pensions Bill within six months if an amendment tabled by Labour is passed and obliges the Government to carry out a review.
Many thanks to Professional Pensions for their report on the amendment to the Bill which was proposed by Labour MP Cathy Jamieson.
She said that the review would include analysis of the impact the changes had on the use of salary sacrifice arrangements. This is over a concern that employees could exploit the potential tax advantages of salary sacrifice with the tax-free benefits of pension saving and later take their pot as cash.
In a public bill committee debate, Jamieson raised a concern that the government had failed to fully consider the tax effects of the changes. She said: "Has there been enough focus on the taxation implications and has that been considered enough in the discussion about putting the guidance guarantee in place?"
The review would also look at how the freedoms have affected revenues at the Treasury, as well as the effect on the purchase of annuities.