Furtive EU raid on savings
Pension pots are, according to reports, likely to be raided to finance the European Insurance and Occupational Insurance Pensions Authority. The news, which broke earlier this week, could result in a retirement nightmare for thousands of people. If the EU-based financial watchdog is granted a stand-alone budget, it is likely to be retirement savings and taxpayers who will bear the brunt.
Even though there is already an existing budget of £16 million for this Authority, if this move is granted, many more bosses may be forced to abandon substantial final salary schemes for employees as they will be hit with additional costs. If companies are finding it hard to maintain these final salary schemes at the moment, many will be almost impossible to continue if they are then obligated to contribute to the financing of this European watchdog as well.
To my mind, the UK doesn’t need another pension watchdog. There are already two in place, so surely a third authority based in Europe is unnecessary, particularly if savers and taxpayers are footing the bill. It will merely add further European insult to UK injury.
Whichever way you look at it, the move is a stealth raid on pensions and taxpayers’ savings. According to the report published this week by the European Parliament’s Committee on Economic and Monetary Affairs, extra finance will be raised from “market participants and the Union budget,” or in other words, “pensions and taxpayers.” People’s hard-earned money will be taken away by yet more charges, making saving for retirement an even more daunting prospect for many. Which brings me to the subject of the reported decline in defined benefit pension schemes.
Nigel Green deVere Group
Blog written 10th November