The UK investment management sector has said repeated shifts in savings, investment and pensions policy are making it harder for people to prepare for retirement and are holding back investment into the domestic economy.
According to the industry, uncertainty ahead of fiscal events is especially damaging, with concern that “the future direction of the pensions tax regime damages people’s ability to plan and invest for the long-term”.
Survey findings published by the Investment Association (IA) show that 38% of respondents believe changes to pensions policy in the UK have made future planning more difficult.
A further 34% said they are concerned that pension tax advantages could be reduced after the Autumn Budget.
Another 33% said they would increase pension saving if tax rules were expected to remain broadly steady during their working lives.
The IA is asking the Chancellor to set out a long-term and stable structure for pension taxation.
It wants the government to work with the industry on principles that would give savers clearer expectations that money placed into pensions will be taxed in a way they can understand and that will not be fundamentally altered over their lifetime.
The association has set out several wider tax and market measures.
It said there should be no further rise in capital gains tax, arguing that such a move would conflict with efforts to encourage a shift from cash holdings into longer-term investment.
The group also urged ministers to “preserve the simplicity and integrity of the tax-free ISA brand which is essential if we are to succeed in encouraging more people to invest and secure their financial futures.”
Among its other proposals, the IA called for stamp duty on shares to be scrapped, saying the levy acts as a direct barrier to investment in UK-listed companies. It said the UK applies the highest tax on share transactions globally.
The association called for steps to reinforce UK capital markets and expand the supply of investable opportunities, through changes intended to improve market competitiveness and remove obstacles to investment.
IA CEO John Owen said: “Britain’s ageing society is becoming increasingly expensive. The State Pension alone can no longer be expected to provide the retirement income future generations will need, so robust and trusted private pensions must fill the gap.
“This budget must therefore give savers long-term certainty, remove taxes that hold back investment and strengthen the pensions system on which Britain’s future retirement security depends.”
“Policy shifts damage retirement planning and UK investment, sector warns” was originally created and published by Private Banker International, a GlobalData owned brand.
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