David Brooks, Technical Director, Broadstone:
- A quiet budget for all the big news, i.e. pensions tax relief and, if the pensions industry would stop and pause for a second, this was highly predictable. The Government appears flush with cash and does not need to scratch the pensions tax relief itch now. I am sure it will one day but a Budget at this stage in the political cycle tackling a thorny issue like that (and risking further Tory turmoil) was clearly off the cards. The Lifetime Allowance and Annual Allowance (with their foibles and problems) remain unchanged.
- Instead we had a budget building on themes of the past and incentivising patient capital investment from pension funds and pledging action on the difficult problem of encouraging the self-employed to save for their retirement.
- As it should be with Budget announcements anything proposed is to be considered and consulted on. Pension Scams, self-employed and patient capital investment are all included as future consultations or at the final stages of consultation.
- However, what is notable is the reduction in funding for the Pensions Dashboard. The Government have said they will wash their hands of it (although the feasibility study remains undisclosed) it does not look like there is going to be any further involvement from Government on its development, construction or promotion. Pensions industry, your ball.
- The RPI debate still lingers 8 years on with the Government taking further baby steps away with it. Soon it will be a measure purely used by pension schemes with it hard-coded in their rules. There may come a time when this anomaly looks ridiculous and untenable. We may be a number of years from that stage but fewer uses it has the harder it may be to retain.