03/02/2013 10:41 GMT | Updated 03/04/2013 06:12 BST

Stop Fiddling With Pensions and Encourage People To Save Instead!

We need to encourage retirement planning, rather than using pensions as a political football.

Why does the government keep messing with pensions? Can't they stop splashing about in the financial mire when it's obvious our problems run deeper than any government is prepared to delve. The chancellor's latest idea to cut pension allowances to tackle the financial deficit seems more like a tickle to me.

In April 2014 he proposes to cap people's lifetime pension allowance from £1.5 m to £1.25 million. In my opinion this won't help the economy or create any immediate wealth as it affects such a small minority. All it will do is cause a loss of confidence in the system and discourage people from planning for retirement, putting further burden on the state.

A pension is simply a tax efficient savings plan and most of us would be more than happy to settle for a pot worth £1.25 million. But this constant chopping and changing is undermining the benefits.

In April 2006, the government set the pension limit at £1.5 million and gradually increased it to £1.8 million in 2011. Last year, the cap was reverted to the starting rate and is now being reduced again - that's a loss of one third in two years.

These changes might only affect the highest earners, but the message it sends out is one of uncertainty. Savers at all income levels are reluctant to pay into a pension when they don't know what its future will hold.

We need to encourage retirement planning, rather than using pensions as a political football. In his autumn statement, Mr Osborne said we were "all in this together". This implies everyone will be penalised by the proposed cuts, but it turns out MPs and senior civil servants are exempt. How convenient.

This cap might stop people saving in ten years time, but will it benefit our economy now? And why has the opposition not objected? I suspect it's because the cuts won't apply to the shadow cabinet either.

If you think the cap might affect you, there are other ways to save for retirement.