The contents of the chancellor’s old red lunchbox provided much of this week’s news thrust, with tax allowances and savings incentives garnering the most interest on the site since Wednesday (18 March).
George Osbone’s economic address was not quite as epoch-defining as last year’s - some in the pensions market might say, thank goodness - but the Budget did provide a few tasty morsels that will kick off the campaign proper in the run up to May.
Here are FTAdviser’s five key points from the last seven days of news:
1. Quartet of savings plans - and one raid.
Towards the end of his speech, the chancellor laid out some new ideas to get the nation saving more, chief among them being a couple of Isa developments: one giving more flexibility and the other aimed at first-time buyers.
The latter was subsequently torn into by estate agents, who argued that won’t be able to help those struggling for the first rung of the property ladder if rising property prices mean there are still a dearth of affordable homes to buy.
But while he gave with one hand Mr Osborne took away with another, capping the amount people can save into their pensions. The decision to reduce the pension lifetime allowance from £1.25m to £1m from April 2016 in order to increase relief costs was decried by many in the industry.
While economic secretary to the Treasury Andrea Leadsom pointed out that the median pension pot is £78,000 and only about 4 per cent of people have more than £1m, Barnett Waddingham senior consultant Malcolm McLean said it’ll reduce a future pension to little more than £27,000.
2. Annuity for cash plans confirmed.
The plight of ‘trapped’ savers had been a major cause for consternation post-Budget, while this plan to extend to them last year’s freedoms had also been trailed for long enough to let commentators really consider their barrage of carefully-worded press releases.
For what it’s worth, the majority of pension professionals are warning of potential consumer detriment should the second hand annuity market proposals ever come to pass. Some life companies, expecially annuity specialists, are conversely intrigued by the potential.
Crucially, the government laid out the various hurdles that must be overcome in its official plan for the policy, one of which being that those wishing to sell their guarantees may be compelled to take independent financial advice to prevent another mis-selling scandal.
By Thursday, FTAdviser reported on one advice firm that has already been fielding calls of interest from the public, confirming expected demand but reciting concerns that those most desperate to cash in their policies would be most at risk of getting a bad deal.
3. Sipps celebrate 25 years with ‘bad advice’ fines.
A landmark for the self-invested pension sector was marred this week, as no sooner had FTAdviser’s sister title Money Management wished them a happy 25th birthday, than the Financial Services Compensation Scheme hit pensions intermediaries with a £20m interim levy over ‘bad’ advice on Sipp transfers.