Advisers have mixed views on the decision to leave out pensions from the King’s Speech after much anticipation.
The King’s Speech yesterday (November 7), set out the government’s legislative priorities for the next 12 months, of which pensions were expected to be front-and-centre.
King Charles' speech was predicted to confirm plans to drive higher levels of investment in private equity via pensions.
The speech was expected to mention the chancellor’s ‘Mansion House’ reform package which includes: an agreement between major workplace pension schemes to increase investments in private equity, exploring handing defined benefit (DB) scheme sponsors greater flexibility to access surpluses and proposals to encourage consolidation of small pension pots.
However, the speech did not mention any of those areas and while it took many by surprise, some advisers have welcomed the decision.
Darren Cooke, chartered financial planner at Red Circle Financial Planning, said: “For what it's worth I'm rather glad pensions were not mentioned, I think the proposals to drive investment in private equity are nonsense anyway.
“More designed to make Tory party cronies rich and pension holders. Frankly private equity can get in the bin full stop, it does far more harm than good in the world.”
He added: “I'd rather they leave pensions alone for a while, we have had quite enough change over the years and it really doesn't help people to trust pensions and retirement planning when they most need to. “
Likewise, Philip Milton, of Philip J Milton & Company said he has issues with some of the proposals so perhaps more thought is being given.
On the one hand, he argued that he is in favour of the use of more ‘back Britain’ investments but he struggles to understand how pension fund trustees can be forced to buy ‘stuff’ in their pensions regardless of investors’ individual risks.
“Also at the same time that great things like investment trusts are being shoved-out if the inane fee issues under consumer duty disqualify them,” he said.
“The cost oppression will deter PE, commercial property and other forms of investment from being supported and ‘cost’ is not the only consideration in a long-term investment choice for a pension.”
‘Injection of life’
Not all advisers were in agreement as Tim Morris, IFA at Russell & Co Financial Advisers, said there were “some big opportunities missed”.
“After a few years of relative stability and lack of pension tinkering, we had what appeared to be some positive policies,” he said.
“Regarding the main one, the lifetime allowance being scrapped, we are still waiting for further details. Hopefully, that will become clearer at the Autumn Statement in two weeks' time.”
“As will the plans for increasing private equity investment and small pot consolidation.”
Morris said private equity investment is needed to give the UK stock market “an injection of life”.
“And the latter to stave off the increasing difficulty people are having keeping track of their myriad of pensions,” he said.
