I watched the Emergency Budget with anticipation to see if and how the pensions world would suffer.  Before the Election we had several parties with differing views on pensions and we ended up with a Coalition not knowing how their policies would eventually look.

I came away from the TV thinking that there wasn’t much in the budget about pensions.  But now I realise there was – although mostly subject to consultation.

• There was confirmation that the basic state pension will be increased each year by the greater of the increase in inflation, the increase in national average earnings and 2.5% per annum.
• There will be a consultation on the possible repeal of the high income excess tax relief charge (as proposed by the last Government) and its possible replacement by a reduction in the Annual Allowance to between £30,000 and £45,000.  Any change must deliver the same savings to the Treasury.
• Confirmation of a review of the timescale for increasing the State Pension Age to 66 – this review has already started.
• A review of the age 75 rule.  There is no requirement to buy an annuity at age 75 but there will be a review of the options available.
• Confirmation that the default retirement age of 65 will be removed.
• The introduction of legislation to enable the National Employment Savings Trust (a compulsory pension scheme for employers and staff to be introduced soon), to be treated as an occupational scheme and therefore able to benefit from normal tax reliefs.
• Confirmation of public service pension provision to be undertaken by the Public Service Pensions Commission.

It’s also worth noting that confirmation was given that Employer Financed Retirement Benefit Schemes (EFRBS) are within the scope of proposed legislation that will take action to consider arrangements which use trusts to avoid restrictions on pensions tax relief.  There will also be consideration of a general anti-avoidance rule (GAAR).

So, lots of changes, but quite what they’ll be, we will have to wait and see.  It is clear that we should all encourage a savings culture, as we all want our retirement to be an enjoyable period.  You should contact an independent financial adviser if you need any pensions advice.  Or contact us by phone: 01582 839280 or email.