Meeting Northumberland Pension Wise recently at the Prudhoe Over 50s Fair

It was a real pleasure to have a chance to meet and discuss pension advice with the CAB advisors who are providing guidance on the changes to the rules as to pensions and annuities that were introduced by the government within the last year. They are doing a great job.
To access this advice go to a CAB office, call the Pension Wise number, 0300 123 1047, or visit www.pensionwise.gov.uk. I am seen here with Sally Lockley of the Local CAB, who do a great job.

Part of the Pension Bill Committee this week - scrutiny of the new flexibility to access pension savings at 55

The changes to the pension tax rules announced at Budget 2014 will give individuals greater flexibility to access their pension savings. They will not have to purchase an annuity. 
The Government announced in the Budget 2014 proposals to allow people aged 55 and above, from April 2015, to access to their money purchase pension savings as they wish during retirement. The Bill I am involved in will help effect this change.
The Committee has done line by line scrutiny last week, this Tuesday and today between 9.25-4.30 in Committee Room 12 of the House of Commons.
Full description of the Bill is here: https://www.gov.uk/government/publications/draft-legislation-the-taxation-of-pensions-bill
As one Ponteland pensioner put it to me - "it is my money that I have saved. I think I should decide how best to invest it."

"Trusting people with the money they have saved is a good thing" - the man on the Ponteland Doorstep

In Ponteland over this weekend I knocked on a number of doors. I spoke to many locals about the proposed pension changes and the new law which will allow pensioners who have saved to take their pension pot and invest it -  rather than having to buy an annuity. Everyone I spoke to welcomed the changes. I will try and set out the position in a little detail below.

What is the change?
Under the proposals, from next year millions of people reaching retirement age will be able to spend their pension pot in any way they want. This will remove the requirement on many people with defined contribution pensions to buy an annuity; an annuity is a financial product that guarantees an income for the rest of your life. The problem is that annuities pay very low returns, are taxed very highly and incur significant charges from the provider.
The government says that the overhaul will give retirees more flexibility to do what they want with their pension savings. As the man in Darras Hall put it to me, on his doorstep of Western Way.
"People have saved all their lives. They are the responsible ones. And isn't a Conservative policy to trust people?"
Another householder said: "Trusting people with the money they have saved is a good thing"

Who does it affect?
The new system is planned to be introduced fully in April 2015, but only for the 320,000 or so who retire each year with a defined contribution pension pot. If you are already into an annuity then that situation will stay.

What's wrong with annuities?
Some have called these poor value and you are locked into the income it provides for life, with no possibility of this increasing if rates improve. You also cannot pass on any remaining pot to surviving family. So if you buy an annuity and die two years later, your remaining pension pot goes to the annuity provider. It is possible to buy one with a guarantee that will pay out any remainder on death to surviving family, but these are more expensive, while any remaining lump sum left is taxed at 55%, making them unappealing. It is great news that the government have decided this has to change.
The changes will come with free and expert advice, provided for by the government so that people make their own informed decisions.

The Labour approach:
- their response was best summed up by this comment from a Labour spokesmen Tom Watson MP and he Blair advisor John  McTiernan - "you cannot trust people to spend their own money wisely" - on last weeks Newsnight.

For my part I agree with the man in Ponteland: "Trusting People with the money that they have saved is a good thing".

Specifics on child care, pupil premium and apprenticeships

The wealthiest bear the greatest burden of taxation and that resources are targeted at to those most in need. That to me is compassionate conservatism. For 13 years under Labour the top tax rate was 40%. It is now 45%. And on the specificvs of how the state spends its money we are targetting resources:

Take nursery education: the spending round confirmed that the government will continue to fund free childcare places for 3 and 4 year olds and that it will extend this to the most disadvantaged 2 year olds later this year. What a contrast to Labour’s legacy of unaffordable childcare, where working mothers would only break-even on childcare costs after working for 4 months.

The pupil premium: which is being protected in real terms. This allows schools to provide targeted support to disadvantaged pupils. The conservative element is that headteachers get to decide how best the £900 per pupil is spent.

Apprenticeships: and again the government is directing funds to give young people the skills they need to succeed. Locally apprenticeship starts have increased by  over 50 per cent in the last year.

Real terms growth in the NHS and social care budgets show a commitment to the social contract with the British people. This is a social contract, not a socialist contract. Increased NHS spending is being combined with stripping out unnecessary tiers of management and bureaucracy, and enhancing patient choice.

Pensions: Towards the end of the life cycle, the triple lock guarantee that the basic state pension increases each and every year by the highest of earnings, prices or 2.5 per cent.

Compassionate Conservatism is not just about spending. The chancellor’s cradle to grave conservatism is matched by tough reforms to the welfare state, the introduction of Universal Credit, and getting 1.5 million people back into work. Wealth has been redistributed from the rich to the poor by raising the tax threshold to £10,000. The rich have been taxed more every year under this government than they ever were under Gordon Brown, confirmed by the Institute for Fiscal Studies.

Cradle to grave conservatism is not a left-wing agenda. It is in the great tradition of conservative social reform. It is possible to be a compassionate government without saddling future generations with debt