There was scarcely a mention of the ‘P’ word in October’s Budget speech (believe us, we were listening closely for it!). However, we had a good read of the accompanying ‘Red Book’ looking for any mention of pensions. At 106 pages, this was no mean feat. Fortunately, though, it was time well spent as some changes to pensions were mentioned that you may otherwise have missed:
The Pension Dashboard
HM Treasury confirmed that the Department for Work and Pensions (DWP) would look at designing a pension dashboard which would include your state pension. The pensions dashboard will be an online platform that will let you see all of your pension schemes in a single view. The average worker is nowadays expected to work eleven jobs during their career and keeping track of so many pension pots could prove confusing to say the least. There was an extra £5 million of funding for the DWP to help make the pension dashboard a reality.
Patient Capital Funding
The government announced a pensions investment package which should make it easier for direct contribution pension schemes to invest in patient capital. Patient capital refers to investments that forgo immediate returns in anticipation of more substantial returns further down the line. The government may review the 0.75% charge cap and there is widespread speculation that it will be increased to allow more investment in high growth companies.
Cold Calling Ban
The government has promised to ban pensions cold calling as part of a drive against pension scammers. Almost two years since the government’s initial proposals to combat pension scams were announced, pensions cold calling will finally be made illegal.
As much as these measures go a long way to making people’s pensions more secure, the government will be powerless to enforce cold calls made from abroad and not on behalf of a UK company. It is unclear how and if the government will work with international regulators to mitigate the dangers of such calls.
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We have set out above what is only a brief summary of some key points that involve quite complex considerations. Allowances, caps, levels and bases of, and reliefs from, taxation are subject to change and their value to you will depend upon your personal circumstances. Information and data may change after the date of their original promulgation in our Newsletter or this Focus article. Always seek relevant professional advice before taking, or refraining from taking, any action.
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