Aegon has outlined its priorities for savers and called on the Chancellor to become a champion of intergenerational fairness in his first Autumn Budget.
Steven Cameron, pensions director at Aegon, said: “As MPs return after the summer recess, there’s no doubt about what will be top of their agenda. Brexit is looming, and negotiations about the future direction of the UK are ambling along at a painfully slow pace. But with the Autumn Budget fast approaching, it’s vital that the Chancellor doesn’t take his eye off other issues that will shape the future for UK savers.
“We’re hoping the Chancellor goes a step further than Work and Pensions Secretary, David Gauke, and firmly rules out any short term changes to the pension tax relief system. Not only could such changes be damaging to the next stage of the roll-out of automatic enrolment, but they could cause further financial uncertainty amongst savers on top of Brexit.
“Brexit aside, there are opportunities to develop impactful policy in this Parliament and we are calling on the Chancellor to use his first Autumn Budget to champion intergenerational fairness. Creating a set of principles to test all government policies against would be a clear and bold signal of intent that the Government is looking across generations and will avoid overburdening one generation at the expenses of another.
“While the Government’s fingers were burnt by the Manifesto proposals on social care funding, we urge the Chancellor not to avoid this emotive issue and to set the pace for finding a long term solution to this growing crisis of an ageing society. We need a sustainable deal between individuals and the state that can give people certainty over what the Government will pay and what they’ll be personally responsible for. As part of this, we favour setting a maximum amount that people need to spend before the government takes over, not least so people can plan ahead while protecting inheritance ambitions.
“Thinking cross-department, the Government could also reduce pressure points across the generations by more joined-up housing and retirement policy. In the housing market, stamp duty is an issue for those at both ends of the age spectrum. Not only is it a further barrier for first time buyers to get on the housing ladder, it’s discouraging older generations from downsizing. Moving to a smaller property would not only free up family homes to those in greatest need, it could also free up funds for property rich, pension poor older generations to fund an increasing longer and more costly retirement.
“With a fragile parliamentary majority it would be easy for the Chancellor to be timid, but there is an opportunity to be both bold and transformative.”