Politics is about choices. What we reward, what we discourage and ultimately, what kind of country we want to live in.
The changes to pension salary sacrifice rules announced in the Chancellor’s Nightmare Before Christmas Budget make one thing clear: the Government is discouraging personal responsibility, and this is simply the wrong choice.
The measly threshold that will be introduced sends a clear message to hard working Brits that there is simply no point in saving for retirement.
As I have warned in Westminster time and time again, the UK is in the depth of a pension adequacy crisis.
Fewer than one in four people are saving for a comfortable retirement. This statistic should trigger the Government to incentivise not discourage saving.
First, Ministers have kicked both the Pensions Review and the Pensions Dashboard into the long grass. Second, they allowed rumours to grow about changes to the Tax Free Cash Lump Sum leading to damaging mass withdrawals. And now, they have, effectively, scrapped one of the biggest incentives for people to forgo part of their salary to secure a more adequate retirement.
More than 3.3 million people in the UK will be impacted. These are not millionaires of wealthy elites. These are ordinary workers who have done exactly what successive governments have encouraged. They have worked hard, earned promotions and pay rises and saved responsibly. However, they now face losing around £50,000 from their retirement pots.
This £50,000 is the difference between self-reliance and potential dependence on the state. The difference between a comfortable retirement or living their twilight years in penury.
And why is this measly threshold being introduced? Just to boost the balance sheets of a Government that is intent on spending like there’s no tomorrow.
Welfare spending continues to rise at unsustainable rates, driven by the Hard-Left on the Government back-benches. At the same time, businesses and the private sector are being placed under greater pressures through higher costs, undermining their growth.
Meanwhile, the public sector continues to be protected. Those at the top keep their gold-plated pensions - funded by the very taxpayer whose retirement savings are being eroded. These schemes grow at an exponential rate and the Government lacks any courage to do anything about them.
Politics is about choices. This Government has made its choice. It has chosen to punish prudent savers. It has choses to disincentivise hard work, and it has chosen to tell people across the country that taking responsibility does not pay.
Instead, the Government’s message is that regardless of how hard you work or how much responsibility you take, you will never be allowed to have more than somebody who chooses not to.
