David Brooks, Technical Director at Broadstone Corporate Benefits [BROADSTONE], the independent pensions and investment expert, says: 

“The political battle to score points out of good news puts at risk the very intention of the Government’s pension policy. The Government’s repeated description of pensions as bank accounts is dangerous and misleading. “A pension is not a bank account. Bank accounts are there to provide for short-term/immediate needs.

 A pension must provide an income (in one way or another) for the rest of your life and often for your spouse’s life. Some pensions have complicated rules and may even be on an entirely difference basis, providing guarantees and security far beyond what you could achieve any other way [DB]. “Importantly income tax is not levied on bank withdrawals. There is a real danger pensioners who think their pension fund as a bank account will get a nasty surprise when they realise they have incurred a 40 percent tax charge on withdrawals that could be avoided by careful planning. “As far as analogies go it falls at almost every hurdle. The public will see these headlines and be misled and in an area as complicated as pensions this is unhelpful and will lead to confusion and poor decision making.”