The UK government’s proposals on simplifying the taxation of pensions could cost the pensions industry as a whole up to £1bn (E1.44bn) in the short term, a consultant says.
Jardine Lloyd Thompson’s technical director June McIntosh says the one-off implementation costs of the proposals could amount to £500m, driven by the need for new computer systems, training and client communications. “It’s going. And there would be “transitional costs”, spread over three years, of a further £500m. The move to the new system was a “multi-stage” process with a lot of work involved, McIntosh said. At least in the short term there would be no administrative saving. She said that it would be six or seven years before savings would come through. She added that the government does not understand the costs involved.