Commenting on the outcomes of the Budget, Malcolm McLean, senior consultant at Barnett Waddingham says:
“Bringing pensions and ISAs together under the same tax regime arrangements would be a major change and all the ramifications need to be carefully thought through. As always with pensions, which are a longterm savings vehicle, the change over from one system to another would require some fairly complex transitional arrangements to be put in force to smooth the operation going forward. It is good that the government is consulting on all of this and not making the mistake they made with the pension freedoms which were brought in hastily and without full consideration of all the issues that could arise.
“Given the importance of salary sacrifice as a means of incentivising, it is good at the moment at least, that the government have resisted the urge to axe this form of relief which is widely viewed as a positive ‘win win’ for both employer and employee.
“The earlier proposal to introduce an annual allowance taper for those earning more than £150,000 has been confirmed and will create some administrative difficulties in its implementation, for example in its relation to defined benefit (DB) pensions. Time will tell how this new measure will impact the wider industry.
“The extension of Pension Wise and the launching of a comprehensive nationwide marketing campaign has to be welcomed given the importance of this service in ensuring that the pension freedoms are properly understood and accessed.
“Efforts to speed up the transfer of pensions from one scheme to another are similarly supported with the possibility of the government introducing a legislative cap on exit charges may yet be a necessary imposition.
“Decisions still need to be made on the proposal to allow the resale of annuities which has been deferred until the autumn and is another controversial area that needs to be carefully thought through.
“Overall this has been yet another eventful Budget from the Chancellor albeit with major and radical decisions still to be taken over the coming year. It looks very much like pensions will continue to be big news over the next few years.”
|
