The next Budget is a couple of months away. And it may actually be called a Budget this time; Jeremy Hunt’s was an ‘Autumn Financial Statement’, and Kwasi called his, accurately for all the wrong reasons, a ‘Game-Changing Fiscal Statement’. At pretty much every actual Budget since I’ve been in the business, man and boy, there’s been a rumour that tax relief on pensions would either go, be reduced to a flat rate of say 30%, or be limited to the basic rate. The big rush to get in quick just in case has always been great for financial advisers and hasn’t done our clients any harm, as their minds have been focused on the advantages of pension planning for a couple of weeks at least. So, what are the odds of something happening on 15th March? Is the release of these figures the start of some ground-laying? And, crucially, how many votes would a limit to the basic rate lose? Not many, I’d say. Of course, that won’t save anything like the headline figure of £27bn, and suddenly making workplace pensions more expensive for the majority would be a definite electoral coffin nail, were any more needed. But every little £bn helps and few Chancellors, sadly, can resist a little low-impact (for them) pension tinkering.
“HMRC scraps plans to tax pensions after death”
A couple of other Statement Highlights (in my world, anyway). A welcome ‘nothing happened’ on the treatment of pensions on death. They were never going to be liable to IHT (too complicated with trusts and trust law) but there was talk of making them income-taxable on the recipients at whatever age you die.
