I'm starting to wonder if one of George Osborne's ex-girlfriends ran off with an actuary. There has to be an explanation for why the chancellor seems to want single-handedly to destroy the annuities industry.
As the Taxation of Pensions Bill, published this week, shows, Osborne's not taking any prisoners with his pensions revolution. You're going to be able to take your 25% tax-free cash out of your pension in dribs and drabs rather than as a lump sum.
You're going to be able to pass it on to your family if you die without spending the lot. And despite the protests of various financial lobbyists, this all makes the prospect of annuities in their current form extremely unappealing.
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To be clear, we think these changes aregreat news. We're not entirely sure about
the convoluted methods of turning pensions into an inheritance-tax-avoidance vehicle. But the overall gist that people shouldhave more flexibility and freedom to prepare for and manage their own retirement is a good thing.
And it certainly makes the decision on whether to save in a pension or an individual savings account (Isa) a lot trickier.As Hargreaves Lansdown points out, since the new rules were announced in March, self-invested personal pensions (Sipps) have attracted an extra £116m in funds, compared to the same time period last year.
But there's one very significant problem with pensions that won't ever change. And that's political risk. I've been writing about finance and business for the best part of 15 years now a respectable period, but hardly enough to qualify me as a greybeard.
Yet, I've already lost count of the number of pension revolutions' and more minor upheavals I've lived through.
Remember A-Day, back in 2006? At one point we were all going to be able to stick our houses in our Sipps before the government bottled out of it. They were probably correct to do so, but it just shows how much of an experimental playground pensions are for politicians and Osborne's latest radical, if welcome, changes only confirm that suspicion.
I'm about 25 years maybe six governments' worth away from today's state retirement age. So how many more pension revolutions will I live through before I actually get to claim mine?
Can I be sure that a future cash-strapped Labour, Conservative, or Ukip/SNP coalition dream-ticket government will be able to keep their hands off a tempting-looking, heavily tax-advantaged pension pot? Something tells me that would be unwise.
So, while I'm glad to have a pension with my employer, and I hope that by the time I get to take it I'll be able to enjoy the benefits promised by Osborne's changes, I'll keep stashing some of my savings in my Isa too. And with markets as wobbly as they are, now seems a good time to bolster my cash reserves.
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