On 22 November, Chancellor Philip Hammond delivered the Autumn Budget for 2017. Malcolm McLean, Senior Consultant at Barnett Waddingham, explores what this means for pensions.
"The industry can perhaps now look forward to a period of consolidation and respite for the next twelve months."
After all the pre-Budget speculation that pension tax allowances might be cut or adjusted, it came as a relief that no such proposals were made in the Budget.
This was very much a steady Budget, with no major surprises – in fact, there were no new pension-related changes whatsoever in the chancellors’ address to the House. Hammond has tried to address the issue of intergenerational unfairness through other means than pensions this Budget – for example, changes to stamp duty for first-time buyers and the extension of eligibility for young persons discounted rail card.
It was noted in Budget documents that the increase in the lifetime allowance from £1m to £1.03m will go ahead as planned in 2018/19. There is to be clarification from the Pensions Regulator around which long-term investment opportunities pension schemes can participate in. What this actually means in practice remains to be seen.
The documents have confirmed that both the basic state pension and the new state pension will continue to benefit from the triple lock in 2018/19. There was speculation that the lifetime ISA subscription might have been increased from £4,000 to £5,000, but that now seems unlikely for the next tax year.
In recent years, pensions have been subject to a number of major changes and the industry can perhaps now look forward to a period of consolidation and respite for the next twelve months. This does not mean of course that the government is not able to spring surprises on the industry for at least the next year. As there is now only to be one Budget per year it seems possible that this period of stability might continue.