Deliberate misrepresentation on pensions?

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IFA Online covered ‘Making Pensions Work’ yesterday, giving it a good report.

In response they also noted that:

Tom McPhail, head of pensions research at Hargreaves Lansdown, says Murphy has missed the point of tax relief.

"Tax relief is a way of deferring taxation on the income in order to encourage deferred consumption," McPhail says.

"Murphy offers up a straw man in stating the general assumption is the state pension is the problem.

"The suggestion the entirety of pension payments in 07/08 was funded by the government displays either a fundamental misunderstanding of the mechanisms underpinning the private pension system in the UK, or a deliberate misrepresentation of the facts."

No it isn’t. It’s none of those things — though McPhail, who presumably lives on the charges paid to private pension advisers — may be guilty of some massive mis-statements.

First I don’t say the general assumption is that the state pension is the problem — others say that — and that’[s why we have so many reviews ion the issue.

Second, I’m not offering a straw man. I offered facts. And they’re simply true.

Third, just because pension tax relief was offered once does not mean that the future conditions for relief cannot be questioned — after all, I’m not suggesting abolishing it.

Am I fundamentally misunderstanding as a result? You’ve got to do better than that to convince me that an industry that we all know is failing to deliver despite massive state subsidies is one that deserves further state support. Because no other industry that has ever failed so badly has ever before justified continuation of a subsidy of the scale this one receives.

No come back with real answers Mr McPhail.