Former Chancellor George Osborne‘s controversial drive to make pensions more like ISAs is set to continue despite his exit from the Treasury, former pensions ministers Steve Webb and Baroness Ros Altmann have said (Pension Advisor).
Both told Financial Advisor magazine they believe such a policy would be disastrous for people’s long-term savings, but said the will to keep pushing for radical reform remained with Treasury ministers and officials.
Mr Webb singled out new chief secretary to the Treasury David Gauke as being particularly in favour of the ISA model. He also claimed Mr Osborne would have had “a team of civil servants who are still in place who will have the same sympathies, as they prepare the legislation for the Lisa.”
He said the new ministers, including Chancellor Philip Hammond, were unlikely to have strong views on the subject, meaning the momentum was “likely to continue in support of the ISA approach in the short term”.
However, Mr Webb said the Treasury would wait to see how the Lifetime ISA was received from 2017, adn then gradually “increase the scope and scale of it”, such as making it a valid option for auto-enrolment.
Baroness Altmann agreed that senior figures at HM Treasury were in favour of the ISA model. Choosing not to name names, she said a move to ISA’s tax, exempt model would “destroy pensions” because it had “all the wrong behavioral incentives”.
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