THE urge to make further changes to the pension system in the Budgethas been resisted by the Chancellor, who declined to make further amendments following a huge overhaul in April 2015.
This is despite speculation he might consider changes to the system for pension tax relief or tinker with the state pension, Mr Hammond was content to leave them be.
The Government had already announced those qualifying for the state pension before April 6, 2016, would see the basic pension amount rise from £119.30 per week to £122.30 from April 2017 onward.
Ailson Fleming, partner and head of pensions for PwC in Scotland, said it had been a “quiet day or pensions”.
“However, hidden in the detail, the Treasury revealed it had taken in much more tax due to pension freedoms than anticipated – over £1 billion more than originally forecast.
“This suggests pension savers who have valued the flexibility have also contributed to the Treasury’s coffers, hopefully delivering a win-win result. This could encourage other savers to take this option and increase the number of pension schemes facilitating it.
“For those looking to transfer their pension to a qualifying scheme abroad (QROPS), a 25 per cent tax charge is introduced from midnight tonight unless a need for the transfer can be demonstrated, as an anti-avoidance measure. This could in effect be an “exit tax” for those who want to leave the UK and take their pension with them.
She added: “Lifetime ISAs will come in from April as expected, along with the higher ISA limits, but no further steps were announced to help harmonise pensions and ISA tax reliefs to better integrate and encourage long-term savings. The Chancellor may be keeping his powder dry until the Autumn Budget.
“The £3,000 NS&I bond paying 2.2 per cent interest will be welcomed by pensioners just about managing on their savings, but amounts to just £66 a year in practice.
“With the Green Paper on defined benefits schemes currently out for consultation, there was little in the OBR’s economic forecast to suggest pressure on these schemes will reduce in the foreseeable future. Action flowing from the paper will be key for any relief, but the lack of parliamentary time for this could delay it significantly.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here