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Pensions escape budget reform - for now!

01/11/2018

The lack of tinkering with pensions in the recent budget has been welcomed by the industry. Surprisingly pensions were not even mentioned despite speculation beforehand that ‘pensions could be a budget victim’ to help pay for the promised increased spending for the NHS.

Whilst we welcome the continuation of the status quo allowing advisers and clients to plan accordingly, we fear that any meaningful change has been delayed only as a result of more pressing issues on the Government agenda and the lack of a clear majority to bring in any radical changes.

There were no changes to the annual allowance, tapered annual allowance or money purchase annual allowance.

The only change is to the lifetime allowance which will increase by CPI to £1,055,000 from April 2019 (from £1,030,000 currently). 

However the budget confirmed the Department for Work and Pensions (DWP) will consult later this year on the detailed design for the Pensions Dashboard and that it will ‘include the state pension’ – seen as a very positive move for millions of savers to be able to view their funds for their retirement.

Alongside the budget the Government also published its response to its consultation to ban pension cold calling which is due to be introduced this autumn.

The Chancellor has also left the door open for a spring budget if a Brexit deal fails to materialise. So, although pensions have been largely untouched in this budget, one statement from his speech that we may need to remind the Chancellor of in the future, if he decides to reduce the cost of pension tax relief to the Treasury, is: "I am not in politics to put people’s taxes up”.

So if he subsequently reduces the pension annual allowance or lifetime allowance or reforms pensions as must be the longer term intention, he will have indirectly done so. 

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