No news is good news for pensions

Phil Brown

Phil Brown

As Budgets go, for a pensions specialist, that is the quietest in recent years.

I know many in our industry will be breathing a sigh of relief that there were no more major pension changes given the pace of reform previously.

With the FCA’s interim report on the Retirement Outcomes Review finding people are moving their pension pots into other savings or investments because of lack of trust in the market, some stability can only be good news.

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We believe the plethora of government changes in recent years may have made pensions seem uncertain or too complicated to the public and chancellor Philip Hammond is right to offer savers some certainty for a period.

That being said, it is a shame that the chancellor continues to shy away from introducing a flat rate of tax relief for pension savings or removing the lifetime allowance.

Both of these reforms would make the pension system easier to understand and encourage more people to save.

We hope that these haven’t fallen off the agenda completely and the government will continue to consider them.

While the stamp duty reform is brilliant news for first-time buyers we were also disappointed to not hear anything about removing it for pensioners downsizing to fund their retirement.

LV has previously called for the government to scrap unfairly high stamp duty costs for downsizing pensioners.

We found a third of people approaching retirement are counting on the value in their property to enable them to live comfortably once they stop working.

As well as giving retirees more options in retirement this change would have provided a much-needed injection of larger homes into the market for families struggling to move up the property ladder.

At the Spring Budget, the chancellor promised a green paper on social care by the end of 2017, which we might have expected to be a key part of this Budget, but we heard last week that this has been delayed until summer 2018.

Reform in this space is vital so it’s understandable the government wants to take time to get it right, but this was an ideal opportunity to encourage people to save for their care costs in their retirement and therefore must remain a priority. 

However, given the lack of focus on pensions and people of retirement age in this Budget, it leaves me asking the question: are we due to get a big change soon?

Will we get something along the lines of the ‘Income and Corporation Taxes Act 1988’ for a post-European Union era United Kingdom next time around?