Malcolm McLean, Senior Consultant at Barnett Waddingham comments: “After all the pre-budget speculation that pension tax allowances might be cut or adjusted, it came as a relief that no such proposals were made in today’s Budget.
“This was very much a steady as you go Budget, with no major surprises – in fact there were no new pension related changes whatsoever in the chancellors’ address to the House. Hammond has tried to address the issue of intergenerational unfairness through other means than pensions this Budget – changes to stamp duty for first time buyers and the extension of eligibility for young persons discounted rail card.
“It was noted in Budget documents that the increase in the lifetime allowance from £1m to £1.3m will go ahead as planned in 20018/19. There is to be clarification from TPR around which long term investment opportunities pension schemes can participate in. What this actually means in practice remains to be seen.
“The documents have confirmed that both the basic state pension and the new state pension will continue to benefit from the triple lock in 2018/19. There was speculation that the lifetime ISA subscription might have been increased from £4,000 to £5,000, but that now seems unlikely for the next tax year.
“In recent years pensions have been subject to a number of major changes and the industry can perhaps now look forward to a period of consolidation and respite for the next twelve months. This does not mean of course that the government is not able to spring surprises on the industry for at least the next year. As there is now only to be one Budget per year it seems possible that this period of stability might continue.”
Stuart Price at Quantum Advisory: Pensions experts have been predicting that the Government will reform the current tax relief system and it was widely expected that this would be announced in today’s budget. However, with Brexit quite rightly at the forefront of Philip Hammond’s speech, pensions were nowhere to be seen.
Personally, I believe this is very good news as, in my opinion, any potential changes to pension tax relief such as a single flat rate for all savers, the removal of salary sacrifice for pension contributions, reductions in the Annual Allowance and Lifetime Allowance would have been to the detriment of pension savers in the UK.
Although we can breathe a sigh of relief now, given the suggested economic benefits of revising the current tax relief system for pensions, I’d say we can’t rule out changes in the not too distant future.
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