Budget announcements – reaction from accountants, IFAs, brokers and IT experts

by | Mar 15, 2023

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While almost all of Chancellor Hunt’s Budget details had been previously leaked, there were still some surprises in the details to get advisers and other experts commenting as follows:

Mitul Pandya, managing director at accountancy firm, Charterwells“Overall, this was a highly targeted Budget for businesses to invest in capital and to lure people back into the workforce. This will help the UK get back to growth and ease the burden of the shortages we are seeing in the labour market. For the NHS, this is positive news for senior consultants who are incentivised to carry on working for more years by the removal of the pension Lifetime Allowance.”

Petronella West, CEO ofLondon-based wealth manager, Investment Quorum: “Jeremy Hunt has eliminated the lifetime allowance cap on tax-free pension savings, and the annual tax-free allowance for pensions will rise from £40,000 to £60,000. These changes will help simplify the pension system again and actively encourage people to invest more in their future. Our clients have reacted positively to this news and have already started asking us whether they should put more money into their pensions. This is very welcome and exciting news for a large number of pension investors.”

 
 

Riz Malik, director of Southend-on-Sea-based R3 Mortgages: “Rather than devising a quantum strategy, it would be great to have a housing strategy. The Chancellor must have left part of his speech at number 11 Downing Street. Even potholes got more of a mention. The Chancellor is more concerned with filling in holes in the ground rather than building on it. I’m sure first-time buyers struggling to get on the ladder or people worried about their mortgages will take consolation in the fact we will be investing in a £900m supercomputer. The Government is handing Labour the keys to Number 10 on a plate. The saving grace is that increasing childcare provisions for every child over 9 months will potentially help with mortgage affordability.”

Samuel Gee, director at Bristol-based Manning Gee Investments“This Budget demonstrates a clear commitment to promoting work and productivity, which are the foundation of the UK economy. The inclusion of major early years reforms offers additional support for parents with childcare costs. There is clear encouragement for non-employed individuals over 50 to return to work, and the protection of disabled individuals’ benefits while they are employed helps to place employees and enterprise at the forefront. While the 3-month extension to the energy support scheme will provide critical assistance for those living on the edge, the long-term effects of the cost of living crisis will continue to cause stress and anxiety for many consumers, undoubtedly posing a challenge for the Government for some time to come.”

Samuel Mather-Holgate of Swindon-based advisory firm, Mather & Murray Financial: “The expected disappointment for small businesses came. The unnecessary increase in corporation tax could have been offset somewhat with changes to business rates and/or national insurance, but we saw nothing from an uninspired Chancellor who has lost his grip on the business community. This was a Budget with few ideas damning the country to stagnation for years to come.”

 

Philip Dragoumis, owner of London-based wealth manager, Thera Wealth Management“In terms of the pension reform announced in the Budget, both the increase of the annual allowance to £60,000 from £40,000 and the abolition of the lifetime allowance will ensure more people are incentivised to remain in work and save for their pensions and will not have any tax disincentives to stop working. The pension rules are also getting simpler, which is another real positive. There has been no change to the tapered annual allowance so the very high earners will still not be able to contribute, but everybody else will benefit. Overall, this was a very impressive Budget. Also, the fact that the OBR inflation forecast of 2.9% for 2023 is much lower than before is good news for interest rates and government bonds.”

Luke Thompson of King’s Lynn-based PAB Wealth Management: “The Chancellor has really pulled the rabbit out of the hat with the removal of the lifetime allowance for pensions. The general consensus was that this was going to be significantly increased but by removing it completely and increasing the annual allowance to £60,000 he will help a lot of high earners reduce their tax bills. In recent years, we have seen a great many customers get caught by the Lifetime Allowance and for them the logical thing to do has been to retire early. By increasing the allowance, the Chancellor has given a real reason for high earners to continue to work until their state retirement age.”

 
 

Keith Budden, MD at Hampshire-based IT security firm, Ensurety: “In the week that has seen the release of ChatGPT 4, the UK Government is right to provide funding for AI research.  Many of us probably watched some sci-fi movies in the past featuring AI and thought “that will never happen in my lifetime”. Well it’s time to wake up: it has. But, and it’s a big but, ChatGPT and other AI tools remain just tools, and they still require human input. Will they replace your job? Probably not, but could they take a lot of the boring/non-efficient tasks away? Most definitely yes. An AI engine these days can reply to a job vacancy on Indeed (or other employment job board) and craft a reply with sufficient plus points that the candidate gets through to interview, with probably no more than 60 seconds of applicant input.”

Graham Cox, founder of the Bristol-based broker, SelfEmployedMortgageHub.com“The childcare reforms will help massively to get people back into work after maternity leave. This in turn will make it easier to buy a property so that’s very welcome. What’s not so welcome is the ominous silence on house building. Probably because they know house builders won’t build anywhere near the number of property needed whilst house prices are falling. Nothing on social housing either, which is what’s desperately needed to supplement the private rented sector.”

Joshua Gerstler, chartered financial planner at Borehamwood-based The Orchard Practice“This is great news for those who want to invest for their retirement. The Lifetime Allowance penalised those who had invested diligently and sensibly during their working life and discouraged people from putting money into pensions. This removes that barrier. In addition, the increase in the Annual Allowance will encourage people to put more away for their retirement. Pensions are one of the most tax efficient ways to invest, and these policy changes make them even more so. Well done.”

 

Carla Hoppe, founder of employee wellbeing specialists, Wealthbrite: “Older, wealthier workers will be able to put more into their pensions while many younger workers are stopping pension contributions because of the cost of living crisis. While welcome for some, this Budget was a missed opportunity to help struggling young people build long-term wealth and secure their financial future.”

Dean Esnard, director at London-based Magni Finance“The expectation that inflation will fall to 2.9% by the end of the year is the most important information from the Budget. This will undoubtedly give the Bank of England confidence that the base rate increases have worked and hopefully the end is in sight. All eyes will now be on the Monetary Policy Committee meeting next Thursday where we will really find out where we stand.”

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