BUDGET 2012: what it all means for pensions

The much-discussed Pensions Infrastructure Platform (Pip) received only a brief mention in chancellor George Osborne's Budget speech last week.

But in the 116-page supporting document, the government reiterates the Pension Protection Fund (PPF) and National Association of Pension Funds' (NAPF) claims a dozen schemes will be on board by 2013.

And the Treasury has also indicated a second group of pension funds is also in talks over a separate tranche of investment into national schemes like roads, railways, schools and hospitals.

It states: "[The government] has supported the establishment of a new Pip owned and run by UK pension funds, which will make the first wave of its initial £2bn investment in UK infrastructure by early 2013.

"A separate group of pension fund investors has also presented proposals to the Treasury for increasing pension plan investment in infrastructure in the construction phase."

In November, PW revealed the Confederation of British Industry is attempting to negotiate an alternative to Pip with the Treasury for medium-sized schemes.

Meanwhile, the PPF and NAPF have proved resistant to giving the government equal partnership with them in establishing the platform.

Among the most significant aspects a relatively pensions-light speech was the reassurance higher-rate pensions tax relief will not see any "significant" changes, following fears the sum on which it is available would be reduced.

The government also confirmed its commitment to a £140-a-week, single-tier state pension after an internecine struggle between the Department for Work and Pensions and the Treasury cast doubt over the policy.

The state pension will also be reviewed to "ensure pace with longevity" with the quasi-independent Office for Budgetary Responsibility to report on the situation this summer.

Following speculation about the announcement of a 100-year duration gilt, Osborne promised the Bank of England would explore the possibility of an "perpetual" one "with no fixed redemption date", while the bank's gilt buyback quantitative easing facility will remain in place.

And Osborne gave a heavily tax-focused Budget today, with the introduction of a single age-related allowance for over-65s, raising the personal income tax allowance to £9,205, cutting corporation tax to 24% from 2013 and the top rate of income tax to 45% for earnings over £150,000.

Click here for a blow-by-blow account of the pensions-specific aspects of the 2012 Budget as they were announced, with reaction from across the industry and Financial Times' specialist pensions writers.