Budget: Little pension change a ‘welcome respite’
By Tom Carnegie, 22 Nov 17
It is “business as usual” for UK pensions as no major changes were included in the Autumn Budget by chancellor Philip Hammond, although some small tweaks were made to the lifetime allowance, asset management and the personal income allowance.
A welcome respite
Penny Cogher, pensions partner at law firm Irwin Mitchell, said a focus on dealing with Brexit has thankfully led to only small changes being made for pensions in the budget.
“It’s business as usual for pensions. Pensions have suffered in past budgets from huge changes with some very complex rules being introduced,” Cogher said.
“So it’s great news that they’re being given the opportunity to bed down rather than there being more meddling while people are still grappling with the existing rules,” she said.
Tom Selby, senior analyst at AJ Bell, also said the lack of changes were a welcome respite for pension savers.
“The pension freedoms are still less than three years old and a period of stability to allow them to bed in is an unusually pragmatic decision from a chancellor.
“He could easily have taken the axe to pension incentives to curb the increasing cost of tax relief to the Exchequer,” Selby said.
Nucleus product technical manager Rachel Vahey expressed a similar sentiment, saying it was almost unprecedented for a budget to be quiet on pensions.
“We often call for a quiet budget for pensions – and it looks like this time the chancellor was listening to our wishes, with none of the rumoured announcements on pensions tax relief or annual allowances surfacing,” Vahey said.
Despite no major action, the budget does include some minor changes that relate to pensions, these include:
- Increasing the lifetime allowance for pensions to £1.03m ($1.36m, €1.16m);
- Reducing income tax by increasing the personal allowance and higher rate threshold; and,
- A new long term strategy to ensure the asset management industry continues to thrive
Click above to go through to the next slide for further information on these changes.