HM Revenue & Customs is struggling to cope with managing the UK pension system, according to a leading provider of retirement savings scheme.
Rowanmoor pensions said that due to cutbacks after legislation meant to simplify the UK pensions system, some HMRC officials were not able to advise individuals over complex retirement savings rules. "We have known that pensions simplification has failed for some time," said Robert Graves, pictured, the head of technical services at Rowanmoor. "Costs have to be cut in the public sector but we urge the Government to ensure HMRC pensions division has adequate resources to implement the changes they want to make to reinvigorate pensions."
The UK's pensions woes could get a lot worse, with Aon consulting estimating that the deficit in the private-sector's final salary pension schemes could grow by as much as £40bn over the next year. Slow economic growth and the likelihood that the new austerity measures will lead to a fall in the interest earned on government gilts – a key investment for pension funds. "A consequence of the tough financial measures in the Budget is that deficits could increase in the short term," said AON spokesman Marcus Hurd.