Will the UK government reinvigorate the pension fund industry?

There is no doubt that the UK government has a number of specific ideas and tasks in mind for the UK pension fund industry. We have seen George Osborne and David Cameron attempt to tackle the monumental problem of public sector final salary pension schemes as well as various taxation changes with regards to the purchase of annuities and the ability to transfer assets upon death. Will this reinvigorate the UK pension fund industry?

The very fact that the UK government is looking longer term, and willing to give up short-term benefits such as taxes, is a sign of the times. The more any individual has at their disposal in the future, to support their life in retirement, the less pressure this will place upon the UK benefit system. This will allow the benefit system to be targeted towards the more needy of society although whether we will see any significant increase in the state pension in the long term remains to be seen.

Many people believe that Gordon Brown began the demise of the UK pension fund industry by introducing a flurry of taxes on pension fund assets, which had a massive negative cumulative impact upon the sector. Whether David Cameron and George Osborne can reverse this trend remains to be seen but many hope that improvements will follow in the future.