Tom Brake and the Liberal Democrats are delivering the largest overhaul of the pensions system in almost a century, giving people the freedom to take control of their own pension. Tom also heralded the fact that because of the ‘Triple Lock Guarantee’ the state pension is £950 higher, in cash terms, than 2010.
300,000 people a year with defined contribution pension savings will now be able to access them as they wish when they turn 55 subject to their marginal rate of tax. This is one of the biggest ever changes to how people access their pensions, removing the effective requirement for many to purchase an annuity.
Announced in the Budget in 2014, these changes were driven by Liberal Democrat Pensions Minister Steve Webb, who has overseen a liberal revolution in the British pensions system.
Commenting on the reforms Tom Brake said:
“People work hard all their lives and when they reach retirement age, they should be allowed unrestricted access to their pension. I believe that people who have worked hard for over 40 years should be allowed to access their money any time they like. It should not be up to the government to decide when people get their hands on their pension pot”
The Lib Dems have also:
· Introduced a ‘triple lock guarantee’ to increase the state pension by the higher of earnings growth, price inflation or 2.5 per cent, whichever is highest.
· Guaranteeing 9m people a workplace pension, which their employers and the government pay in to, giving everyone the confidence to save. A new simple, single state pension to help people save for a better retirement.
· The foundations for a new model of private pension— the defined ambition pension — where the risks and uncertainties are more evenly shared between employer and employee.
· Abolished the default retirement age-making it illegal for people to be sacked simply because they became a pensioner.
· Authored the freedoms announced at the budget to allow people with annuities the freedom to sell on their existing annuity.