With Spring Statements not meant to include major policy changes, and with this year’s falling in the middle of Parliamentary votes on Brexit, due two weeks later, this Spring Statement is unlikely to include immediate changes, but could give important indications as to how the Chancellor will approach tax and spending post Brexit.
Many are predicting the Office of Budget Responsibility will report an improvement in the UK’s financial position since the October Budget, meaning the Chancellor could be in a position to offer a welcome boost to public services and / or reduce taxes, particularly if a no-deal Brexit can be avoided.
So what might feature on the Chancellor’s post Brexit policy list and what might that mean for savers and investors?
Steven Cameron, Pensions Director at Aegon says: “There is no shortage of policy areas the Chancellor could focus on once the Government’s time is no longer dominated by Brexit. Brexit ‘casualties’ include repeated delays to a new deal on social care funding, extended deliberations around improving pensions take-up by the self-employed and a lack of progress in making the property market work better, particularly for first time buyers. These are major issues which will make a huge difference to the futures of millions of individuals across the age spectrum long after Brexit.
“Top of our ‘urgent’ list is putting the future funding of social care on a sustainable footing. Our ageing population urgently needs clarity on what the state will pay for and what individuals will have to fund themselves, based on their wealth. An increased commitment to Government funding would be very welcome, particularly if introduced alongside a cap on the overall amount anyone will have to pay themselves, allowing people to plan ahead and protect inheritance aspirations.
“An improvement in the public finances could also allow the Chancellor to focus on improving rather than tightening savings incentives such as tax relief on pensions. The Government has committed to looking at ways to increase pension take-up amongst the self-employed. Here, as in automatic enrolment, successfully increasing money saved into pensions means the Treasury collects less in income tax receipts. But encouraging greater self-provision has huge long term benefits for retirees and those of working age alike and should save the Government in benefit payments longer term.
“Post Brexit measures which truly address the challenges of getting on the housing ladder would be welcomed by first time buyers and the ‘bank of mum and dad’ alike. This will need a package of measures, including increasing housing supply, but a cut in stamp duty for downsizers would be a welcome boost, freeing up funds for retirees as well as family homes for those in most need of them.”
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