There is a particular conspiracy theory that is gaining more traction every year.
It is nothing to do with alleged Russian spies visiting Salisbury, but rather it is the likes of Hargreaves Lansdown, Royal London and AJ Bell who are responsible for the annual Budget hysteria on pensions tax relief.
Okay, I know I sound like a loon, and I promise I am not sitting here wearing a foil hat in case GCHQ are tuning in.
But what other explanation could there be for the now annual predictions of doom?
I have covered about 30 Budgets now (if you include pre-Budgets), and there have not been many where the question of the introduction of flat-rate tax reliefs on pensions has not been raised.
Britain is desperately in need of a national strategy for savings. We have auto-enrolment; now we need to turn generations into better investors.Since the financial crisis, the din around the subject has become so loud that it drowns out any common sense debate.
And of course nothing ever happens. The reason for that is that there is no real appetite for reform in Westminster.
So the conspiracy theory goes that this is all some kind of ruse dreamed up by the companies that would benefit the most from some sudden spike in pensions contributions from higher-rate taxpayers.
Twice since 2016 the Treasury has officially said that flat-rate relief is off the table because there is no consensus on reform – and that does not even cover the nightmare implementation of such a policy.
My real concern about this annual hysteria is that it is a self-fulfilling prophecy. The more everyone talks about flat-rate relief, the more acceptable it seems.
We should all be thankful that there was no tinkering with pensions in the Budget – in fact the ‘P’ word never came up in the speech.
It was a very good Budget indeed for well-off pensioners. While a rise in the personal allowance and higher-rate tax threshold were offset for workers by similar increases in national insurance thresholds, this latter issue did not affect wealthier people above state pension age.
As a result, married pensioners earning above £80,000 will see their incomes rise by approximately £360 a year – not bad.
After the giveaways, and the inevitable silence on pension tax relief, it was disappointing that once more a chancellor did little for savers.
Britain is desperately in need of a national strategy for savings. We have auto-enrolment; now we need to turn generations into better investors.
What is noticeable is that despite the personal allowance almost doubling since the Tories took office, the savings ratio has slumped. It now stands at just 3.9 per cent, down from 9 per cent.
If you look at the money held in cash Isas, that has collapsed as well, the data show.
We have seen increases in the cost of living that go some way to explaining this. But I suspect rises in consumption – on Amazon Prime subscriptions, avocados, lattes, iPhones and LCD televisions – is perhaps the greater reason.
That has been good for the economy in the short term. But unless we get a chancellor prepared to tackle this long-term issue, we are going to end up with a lot of people very disappointed with their pensions and relying on the state in retirement.
Dashboard poses challenges
The pensions dashboard seems to have fresh legs after the chancellor announced £5m to get it up and running.
This will probably be enough to push the project along – particularly if providers themselves are going to plough even more cash in.
I think independent financial advisers should be worried. While having smaller pension pots consolidated is undoubtedly helpful for consumers, the dashboard risks putting too much power in to the hands of large firms. Whoever gets a scale proposition working first is likely to hold all the keys to one person’s savings. And that would be bad news for advisers locked out of the system.
Hammond has form
I admit to having been won over by Philip Hammond. His quip-filled Budgets are blessed relief from Gordon Brown’s dour delivery, and George Osborne’s monotonous repetition of figures.
He even announced a £10m street-cleaning fund just so that he could make a joke about Labour’s shadow chancellor John McDonnell falling flat on his face.
Still, chancellors have some past form here. Mr Osborne once gave away £40m so that he could make a gag about former Labour leader Ed Miliband having two kitchens – that is no laughing matter.
James Coney is money editor of the Sunday Times
