23rd March 2014
The Labour Party has shifted its policy on last week’s annuity changes suggesting it broadly supports the reforms while arguing that the details still need to be examined.
Labour shadow work and pensions secretary Rachel Reeves speaking on the BBC Radio Four programme Any Questions said: “I don’t think the annuities market works for people at the moment, so I support reform and I support the changes that people have more flexibility about how to access their money. I can give that assurance.”
Last week, Shadow chancellor Ed Balls had adopted a tougher line about the proposals though he stated he too supported the change in principle because the annuities market was not working.
The shift in Labour policy suggests that that changes are much more likely to become a permanent change to the pensions landscape.
Labour leader Ed Miliband had adopted a less oppositional stance by the end of last week. He said: “We’re certainly not going to reject these proposals out of hand. That would be the wrong thing to do. These are complex proposals. We need to scrutinise the detail and we need to have some clear answers from the government on some of those questions.”
Not all in Labour agree. Labour’s frontbench spokesman Tom Watson has opposed the changes in his own blog and suggested that the move will put an unfair burden on younger tax payers and that it undermines the system of tax reliefs.
This weekend charity Age UK warned that that drawing down on a pension could leave pensioners ineligible for free social care.
Jane Vass, head of policy at Age UK said: “The pension pot is protected from means testing. So when it is in a pension it can’t be touched but there is a risk when it comes out of that wrapper. We do welcome the increased choice but there is a whole range of risks. The better-off might be able to afford to take risks and afford to pay for advice, but it becomes difficult for those lower down the economic spectrum.”