A bright new year has started (hurrah!) heralding another 12 months of dramatic change in the wacky world of pensions (boo!).
Not good for Mr and Mrs Biggins from Dudley in the West Midlands (Mr and Mrs Average) who are already baffled by the complexities that accompany all things to do with pensions.
And not at all good for Mr and Mrs Bart-Williams from the shires (Mr and Mrs Well Off) who will see their scope to build a worthwhile retirement fund compromised by a series of tax attacks instigated by the chancellor.
But plenty of opportunities, I dare say, for shrewd financial advisers to get their hands dirty, pick their way through all the pensions detail, and demonstrate their great worth to their clients – or, even better, to new clients. Hurrah, times two.
The pension changes this year will come thick and fast, like bullets in a John Wayne western (El Dorado and Stagecoach spring to mind). Duck for a moment and you will miss a barrel full of them.
For a start, the lifetime allowance, which not long ago (2010) stood at £1.8m, is dropping from £1.25m to £1m from the start of the new tax year, exposing thousands of savers to a potential 55 per cent tax on some of their pension savings.
Unless the government does a U-turn (unlikely in austerity Britain), it will stay at £1m until April 2018 when the allowance will then increase in line with the consumer price index.
Shameful, I say, especially in light of the fact that we already have a contribution cap (£40,000 per tax year) in place, effectively putting a limit on the size of pension pots that people can build. Boos all round.
That is not all. Additional rate taxpayers, meanwhile, will see their ability to add to their pension pots seriously curtailed, again from the start of the tax year. For some, annual contributions will be capped at £10,000.
And of course, we will see the introduction of the new state pension in April which will pay £155.65 a week to those eligible to receive it (not as many people as we were first led to believe).
A recent investigation by my colleagues at Money Mail indicated that just one in three pensioners reaching state retirement age post-5 April will pick up the full amount because at some stage in their careers they ‘contracted out’.
Baroness (Ros) Altmann, pensions minister, under pressure from women born in the 1950s who are angry over having to wait longer for their state pension, has already admitted to a lot of ‘misconception’ surrounding the changes.
Yet the biggest change this year to the pensions landscape has yet to be announced. It is likely to come in March when the chancellor delivers his Budget and finally discloses the outcome of a review into pension tax relief launched last July. A review bizarrely labelled ‘strengthening the incentive to save’ when we all know the real objective is to cut the cost of the tax relief bill (running at a cool £50bn gross a year).