What to expect from the last ever Spring Budget
By Kirsten Hastings, 1 Mar 17
There has been little buzz around the last-ever Spring Budget taking place on 8 March, ahead of triggering Article 50. International Adviser has pulled together views from the industry about what it expects or would like to see addressed when the chancellor takes to the despatch box.
“Large-scale reform of the UK’s pension tax relief framework was reportedly shelved ahead of the last Budget as former chancellor George Osborne attempted to avoid rocking the EU Referendum boat,” says Tom Selby, senior analyst at AJ Bell.
“It is not inconceivable Philip Hammond will return to these reforms in the Budget – particularly as pension tax relief is expected to cost the Exchequer £38.2bn in 2015/16. With the NHS in crisis, the chancellor may be tempted to raid pensions in order to beef up healthcare.”
If the chancellor cuts the MPAA, Selby believes he may “try and soften the blow” by removing the Lifetime Allowance. “This would be a welcome move as it would greatly simplify things for pension savers and remove the danger they get penalised for achieving good investment growth.
“If the chancellor decides to leave the MPAA as it is and remove the Lifetime Allowance, he could reduce the amount people can pay into pensions each year as a way of controlling the cost of pension tax relief.
“This would arguably be a simpler approach but only if the Lifetime Allowance and the reduction of the MPAA are scrapped.”
Tags: Aegon | AJ Bell | Fidelity | Nucleus | Old Mutual | Pension | Rachael Griffin | Rachel Vahey | Steven Cameron | Tom Selby
