I’m no advocate of politicians meddling with the pension system unnecessarily. But with it widely expected that reform of the pension tax relief system is coming anyway, I’d urge the government to consider including a tax relief incentive for women as part of the change.
Whether this means offering a slightly higher rate of tax relief to women, or some other tax break, the government has the power to give a vital financial boost to the millions of women whose personal pension savings are currently inadequate.
Such a measure should also inspire women to contribute more themselves.
This is controversial stuff. Such a measure would be complex to design, and would inevitably be seen as ‘positive’ discrimination in favour of women.
But Esther McVey, the new Secretary of State for Work and Pensions, might just be the champion such an idea needs.
While a newbie to the pensions world, her previous ministerial stints show she’s not afraid to take on vested interests.
Whether by accident or design, the pensions system currently favours men. If Ms McVey is keen to make her mark and level the playing field for women, this bold if difficult course could be the answer.
But the question is whether she will have the courage. Cometh the hour, cometh the woman?
John Fox is managing director of Liberty SIPP
