Brexit spells danger for annuity reforms, pensions director fears

Plans to launch the Lifetime ISA and secondary annuities market next year could be in peril as key reforms get swept up in the Brexit Tsunami, a pensions director has warned. A new Prime Minister, and possibly a new Government, could be in place by the end of this year. A snap General Election is looking likelier, with the next Conservative leader predicted to seek a mandate from the electorate.And with the UK’s new relationship with the EU being absolutely central to the Government’s priorities, swallowing up vast amounts of time and resources, there are fears that planned reforms in other areas, such as pensions, could be derailed.Steven Cameron, pensions director at Aegon, said: “We’d urge the Government to give an early indication of its plans to take forward initiatives such as the Lifetime ISA and the secondary annuity market.“Unless we get more detail very soon, the April 2017 introduction looks very challenging. There could also be a question mark over the Pensions Bill announced in the Queen’s Speech to review master trust rules.“It is likely the Government will wait until the autumn before considering if tough decisions are required in response to any impact on economic performance, with the state pension triple lock highlighted pre Referendum as at risk. While domestic policy changes ahead of EU exit are a real possibility, we’d urge a truly long-term perspective in areas such as pensions.”Following the vote last week, Tom McPhail from Hargreaves Lansdown suggested pensions tax relief could be an early casualty of Brexit.Mr Cameron said: “We’d also caution against any radical changes such as a major overhaul of pension tax relief, which would run contrary to the wider desire to offer stability where possible.“As we all work to achieve an orderly transition to UK outside the EU, it’s important that industry works closely with both FCA and Government for the benefit of our customers.”Mr Cameron also has concerns over a raft of new EU regulations, many of which are due to be implemented over the next two years or so – such as Mifiid II.The FCA has reminded firms to continue to follow regulations arising from the EU.Mr Cameron said: “While the FCA has indicated firms should continue to implement these too, we would urge a thorough examination of whether each individual proposed change adds value for UK savers long term.“Some may be needed as part of new trade agreements but others may tie up time and resources which might be better spent on longer-lasting initiatives.”

Brexit spells danger for annuity reforms, pensions director fears

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