Folly of granting total pension freedom is now becoming all too clear;

Financial Times - 28 Oct 2017

Sir, It is for the reasons highlighted by Josephine Cumbo that the government needs to reform the pension freedoms regime ("UK retirees using 'pension freedoms' for alcohol and gambling", October 23).

Since the very outset of this debate, when mainstream political opinion was opposed to the idea, I have been in favour of pension freedoms as an alternative to historically poor annuity deals. The key proviso for which I pushed then and have always done since was a requirement for people before gaining total freedom to have sufficient capital to prevent them falling back on welfare. The coalition government opted for total freedom without this proviso and we are now beginning to see the results - people are spending all of their savings.

These citizens are having their cake and eating it. As well as being offered tax breaks to build up their pension capital, people are also able to fall back on welfare once they have spent their savings. Clearly the government will need to revisit this aspect of what remains overall an attractive policy, to prevent the possibility of taxpayers coming to think they are getting a raw deal.

Frank Field MP Labour, Birkenhead, House of Commons, UK


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