Leading industry pensions expert Andrew Tully, technical director at Canada Life, has castigated Labour’s plan to reverse the scrapping of the Lifetime Allowance (LTA).
Mr Tully said the plan would mean playing “political ping pong” with the pensions system.
He warned the move, if implemented, could “wreck” retirement plans.
In his Budget yesterday, Chancellor Jeremy Hunt announced he would scrap the £1.07m LTA pension pot cap from April, allowing people to build up much larger pension pots.
The move was criticised by many, including the Labour Party, as only benefitting a small number of wealthy people while doing little for the majority.
Shadow Chancellor Rachel Reeves MP, a former Bank of England economist, tweeted today that Labour would reverse the LTA if it was in power.
She said: “The Budget was a chance for the government to unlock Britain’s promise and potential. But the only surprise was a £1 billion pensions bung for the 1% – a move that will widen the cost of living chasm. That’s why Labour will reverse this move.”
However the pledge to reverse the LTA axe has concerned a number of commentators including Mr Tully.
Mr Tully, who has a long career as a pensions technical expert and pensions commentator, said the political parties should form a consensus on pension policy and avoid see-saw changes.
He said: “You simply can’t play political ping pong with the pensions system. People plan for the long term and that relies on confidence the goal posts won’t constantly shift. We need cross party consensus on issues like this to deliver the stability required or else we seriously risk wrecking savers retirement plans.
“There are already restrictions in the system limiting pension savings and tax breaks – just let the annual allowance do the job its designed to do.”