Treasury Minister Alfred Cannan says he trusts savers and pension holders to manage their own finances.

He made the comment as a number of pension providers lobbied Tynwald members to vote against this week’s Budget as it contained proposals that would signal a major reform of private pensions.

Mr Cannan announced a new Manx pension which will allow holders to withdraw the whole value on retirement, 40 per cent of it tax free, if they so choose from the age of 55.

But a number of private pension providers say that they are worried about the impact pension freedoms could have on tax revenues and increased social security costs.

They urged Tynwald members to vote against the adoption of the Budget until detailed impact studies have been agreed.

In its email, the Isle of Man Association of Pension Scheme Providers says: ’While we are in favour of the principle we are concerned about the possible effect of these changes.

’We consider introducing any measure without carrying these impact studies, could result in irreparable damage to the island’s social security system and hence the economy.’

The APSP, as representative body of the pensions industry, also cites concerns about fraud and about pension holders making poor future investment decisions.

Mr Cannan, who has long championed the idea of pension freedoms, said that it was not for the Association to determine government policy.

He said he was not surprised at the Association’s response ’given the fees these companies and their directors receive for handling and managing billions of pounds of pension funds’.

But the Minister added: ’Let me be clear: this is not their money.

’I trust savers and pension holders to sensibly manage their own finances.’

It is understood that other pension providers have expressed their dismay at the stance taken by the APSP, accusing it of using ’scare tactics to further their protectionist agenda’.

Similar changes were introduced in the UK in April 2015, allowing savers to spend their pension savings as they wished rather than having to buy an annuity, which provides a guaranteed income for life.

Since then, some £10.8 billion has been withdrawn from pensions.

But police data shows that more than £43 million has been lost to fraud.

And a House of Commons work and pensions committee investigation into pension freedoms has heard evidence that some British retirees are using their windfall to fund alcohol and gambling binges before then falling back on the government for help.

â?¢ Turn to pages 15 to 17 for full coverage of the Budget.