What can we say about the pension levy? Daylight robbery? Yes. Easy pickings? Yes. Our own fault? YES!
What is the pension levy first? It was introduced a few years back at 0.6% of private pension pots. It was to be a temporary measure and the funds would be used to create jobs. It was mandatory and the pension providers were obliged to remit the levy to the government directly from pension funds.
At last year’s Budget, the government committed that they would do away with the levy. And to be fair they did. They did away with the 0.6% levy and introduced a 0.75% levy. Yep, that’s right, the levy was increased. This year they say it is going down to 0.15%. Let’s see what happens.
As for the levy contributions and job creation? If I could see a clear line between a fund that was created and jobs creation I’d be more assured. My suspicion is that the levy is being used to balance the books of Ireland Inc.
So, was there uproar when the levy was introduced? Imagine what would happen if the government decided that they would take a percentage out of everyone’s bank account? A few minor whispers of discontent were heard but all told I bet the government were amazed they got away with it so lightly.
The blame lies entirely with ourselves. The Pension Providers are useless to come together and make representations. They are too busy at the moment trying to beat each other’s’ deals that making representations against the pension levy in a cohesive manner is just not on the agenda. The Financial Brokers are worse! Financial Brokers are well known for not sharing anything with their peers and so trying to get a concerted and dedicated approach is nigh on impossible. PIBA and the IBA (financial brokers’ representative bodies) have made representations (as have the providers) but without back up from the industry at large, these voices are mostly left unheard.
But here’s the thing. You and I – the private pension holders – should not rely on the “Pensions Industry” to have our voices heard. Why not object yourself? Have a look at some of our Social Media stuff and copy and paste the content and send it to your politician or whoever else you want so that the government are aware that this is an issue that could lose them votes – after all that is all that matters to the vast majority of TDs.
Let us know what you think but more importantly let everyone in your wider circle know what you think. Let’s try to stop this Daylight Robbery!
By Carl Widger, Director & Co Founder Metis Ireland