There's public surprise I like pensions

I like working in pensions. This completely amazes people who are not connected with the industry, but it’s true. Part of what I like is that things are constantly changing and there’s always something different to talk about.

Sometimes, though, this constant change can be very annoying, especially when it’s about things that are already there or well-established. This struck me this week, when three different changes were doing the rounds of the pensions rumour mill.

The first one was ASP, the after 75 drawdown option, supposedly only introduced for those who have religious objections to buying an annuity (a very effective recruitment drive for the Plymouth Christian Brethren, if you ask me). The government, in the shape of Ed Balls, has been making comments about tax avoidance and restricting ASP to only those with these views.

And so we find ourselves battling against this and putting forward the calm sensible truth. ASP is a niche market, and as for tax avoidance, the recent changes applying IHT on cascaded funds make sure it’s at best a tax neutral product.

The second change was a real - rather than talked about - one. It was scrapping the requirement for defined benefit schemes to issue a statement to all members showing projected pension and cash at retirement. Not all schemes do this at the moment. It would have made sure that everyone at least had that basic information to help plan for retirement.

To me it’s such a no-brainer, that I can’t really get why some schemes struggle to implement this. For the sake of clear communication I think they should be forced to struggle some more.

The final change is an old chestnut: the LibDems want to remove higher-rate tax relief on pension contributions.

This one comes up time and time again. And time and time again we press home that the higher rate taxpayers are the ones setting up the schemes for the workforce and contributing to them.

If you take away all their incentives, they won’t want to play. And we will all be left with the minimal 3% employer contribution, working longer or stuck in a poor retirement.

What’s most worrying is the signals these changes send out. It’s difficult enough coping with the evolving world of pensions without all the rumours of yet more.

Let’s just deal with what we have, and keep the focus on how to increase pension saving for everyone.

Rachel Vahey is head of pensions development at Scottish Equitable.

The comments expressed are those of the author and not those of the company she represents.