Editorial: A bit of signposting, scheduling and detail. That’s what most seem to be expecting for the pensions industry in Wednesday’s Autumn Statement. No lightning bolts or rabbits out of hats. Just confirmation and perhaps clarification on items we already expect.
No lightning bolts or rabbits out of hats. Just confirmation and perhaps clarification on items we already expect.
However, even this is giving some people the jitters. Not just because chancellor Gideon’s got form when it comes to such surprises, but also because all the hoopla over tax credit reforms has left him having to scurry around to find cost efficiencies elsewhere.
Since news of the tapering plans for the annual allowance broke, higher earners have been responding to the clarion call of wealth managers to funnel as much into pensions as they can before current limits are scaled back. Make hay while the sun shines, and all that.
Illustration by Ben Jennings
Jon Greer, pensions technical expert at Old Mutual Wealth, said in a statement: "If you are a higher rate taxpayer and have the ability to, and are thinking of, funding extra amounts into your pension, I would do so as soon as possible. This is because even though the chancellor has indicated that the government’s future plans on pension tax relief will not be detailed until budget 2016 – with the likelihood that higher rate taxpayers will see a reduction in the relief available on their pension contributions – recent experience suggests we should expect the unexpected."
But some commentators think this won’t have gone unnoticed at Tory HQ. In order to halt this flow of tax relief heading out the door at such a critical time for the nation’s accounts, some envisage an anti-forestalling measure being introduced on Wednesday, effective immediately.
Other areas of pensions that might get a mention include the secondary annuities market, which would open up the pension freedoms to existing annuity-holders. Any ultimate introduction of a market isn’t slated until April 2017, but there’s a chance Osborne might provide an update on the government’s current thinking.
Further detail and clarification on the state pension, particularly for women, will be welcomed by many. As would the abolition of the lifetime allowance.
But all these little tweaks here and there in quick succession is both costly and dizzying for those charged with implementing them, employers in particular.
The sense from certain corners is that, while further change is indeed desired in some areas, the government should give employers a rest until the spring Budget, at which point a raft of pension changes can be presented as a package that gives some indication of the government’s long-term desire for what we now call lifetime savings.
Maxine Kelly is editor at Pensions Expert. You can follow her on Twitter @MaxineEK and the team @pensions_expert
