Broadstone: Autumn budget delay shows focus on long-term reform over quick wins

With the Chancellor’s Autumn Budget now set for November 26th, Broadstone’s David Brooks warns that while pension reform could be on the table, quick wins are unlikely and speculation should be treated with caution.

Commenting on the announcement, David Brooks, Head of Policy at leading independent consultancy Broadstone said: 

“Looks like we’ll have a late budget this year as the Chancellor gives herself time to come up with a plan to get the economy firing and reduce government debt.

“Even though Torsten Bell is part of the drafting team, it still seems unlikely that pensions will be able to give the quick wins needed in November’s Budget. However, this government has got form already in making decisions for the longer term, for example, pushing through pension and investment reforms.

“To this end, the rumours around tax-free cash amendments feel too reactionary to be on the drawing board. However, the long-proposed pensions tax relief changes look likely to be an attractive fiscal lever for the Chancellor.

“This would need to come with a lengthy technical consultation but changing the bonus for saving into a pension to a flat rate could save the government some money and also boost pension savings for the lower rate taxpayers.

“Of course, this would drive concerns around intergenerational unfairness but calls to introduce NI contributions – of some level – for current pensioners could go some way to balancing this by asking wealthier pensioners to shoulder some of the country’s current burden, especially on the NHS.

“However, as always, we won’t know anything for certain until the day, so it’s best to be wary of speculation and avoid making any life changing decisions on rumours – we’ve got a long run up this year. Good luck!”