AJ Bell lays the odds for UK post-Brexit reforms
By Kirsten Hastings, 1 Jul 16
With UK chancellor George Osborne having abandoned his plans to generate a budget surplus by 2020 following Brexit, AJ Bell senior analyst Tom Selby gives his odds on whether HM Treasury will adopt any of the six radical money saving options available to them and if the Pensions Bill will be delayed.
“The Treasury spends around £34bn a year on pension tax relief, so it will inevitably be part of any conversation about reducing government spending if the public finances do suffer following the Leave vote.
“However, the future chancellor will weigh up the case for raising money for the Treasury against the risk of angering the electorate and Conservative backbenchers.
“So while fundamental reform – such as abolishing higher rate relief or introducing a radical pensions Isa system – may be off the table for now, further cuts to the annual and lifetime allowances may provide a more palatable alternative. The government may also revisit plans to link the £1m lifetime allowance to inflation from 2018.”
