Pension credit will add to complexity
The government's proposed new pension credit will increase spending by around 1.2% of GDP by 2050 and add a further layer of complexity to existing legislation, says PwC.
Its evaluation of ten possible state pension policies, including the government’s strategy with and without the new pension credit, concluded that no policy regime scored best on all criteria
The firm measured the policies against a number of factors including whether each policy would be affordable in the long run compared with other demands on the public purse.
John Hawksworth, head of macroeconomics unit at PwC, said: ‘Although we expect the pension credit to have significant long-term costs as currently proposed, the real problem with the government’s strategy is not affordability but complexity.
‘In particular, decisions on pension planning for moderate earners who are not in good quality occupational pension schemes now appear very complex even for pension experts and professional financial advisors, let alone the lay person.’