Labour ‘will support Osborne’s pension reforms’
Saturday 22 March 2014
The Labour Party will support Chancellor George Osborne’s plans to overhaul pensions, the shadow Work and Pensions Secretary has suggested.
Rachel Reeves told BBC Radio 4's Any Questions programme that she supported the changes announced in Wednesday's Budget but said much more detail was needed about what the changes would mean "in practice".
The proposed reforms will allow people to spend their pension pots how they wish rather having to buy an annuity, which guarantees an annual income.
The new rules are due to come in from April next year, subject to consultation, with some existing regulations to be relaxed from next Thursday.
Ms Reeves, the MP for Leeds West, said the annuities and pension market currently "does not work well for people who have saved all their lives". She added: "I support reform and I support what has been announced this week, although we need to see a lot more detail about what that will mean in practice."
Labour wants the consultation to consider whether the move helps lower and middle-income taxpayers, whether people who want to buy an annuity under the current system can do so, and what provision is made for advice.
Ms Reeves said "wider reform", including a cap on pension providers' fees and charges, was needed.
Asked to give an undertaking that Labour would not seek to overturn the reform, she added: "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."
She said she believes "the majority of people" would not choose to draw down their full pension.
Earlier, Labour leader Ed Miliband insisted he backed more flexible rules on pensions, but said his party wanted to look at the detail before it supported the changes in Parliament.
"We're certainly not going to reject these proposals out of hand," said Mr Miliband. "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."
It is expected that anyone over the age of 55 who belongs to a private pension scheme (as opposed to a final-salary scheme) will be able to take out their savings as a lump sum to spend or invest as they wish. Mr Osborne has dismissed fears that newly retired people could "blow" their money.
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