Comments From Pension And Planning Specialists

The Chancellor of the Exchequer, George Osborne, will on Wednesday 8 July deliver the first Conservative Budget 2015 since the party came to power in May.

Although it’s anticipated that there will not be too many new announcements, there are a few surprises expected.

Here Martin Jenkins, Head of Pensions, and London Planning Partner, Martha Grekos, speculate on what could be said and what they would like to hear.

Martin Jenkins, partner and National head of Pensions said:

"A great deal of changes on pensions have been introduced in recent Budgets - most notably ever more restrictive limits on tax relief for pensions savers and a new right to encash pension rights. With all this change , the pensions industry could be forgiven for hoping to be left alone in this next Budget.

“Indeed some of the announced changes from the last Budget are not yet in force including a reduction, effective April 2016, of the Lifetime Allowance to £1m. This change has come in for considerable criticism ahead of its implementation. Potentially modest pension benefits of as little as £25,000 pa could come in for tax charges. Some have speculated that the Chancellor may announce a re-think on this change. A vain hope it seems.
 
“Another rumoured possibility is a change in National Insurance charging. Currently if an employer introduces a salary sacrifice option,  such a scheme is not chargeable to NI. Salary sacrifice arrangements are familiar as means of offering tax effective benefits covering everything from subsidised bicycles to work-place nursery facilities. Pension contributions can also be made under a salary sacrifice plan and as with other such arrangements there is a benefit to employers and staff in reduced NI Contributions. A number of large employers including  British Airways, Lafarge and most of the supermarket chains have implemented such policies. The former Pensions Minister Steve Webb has warned that the Treasury are looking at possibly closing this ‘£15bn loop-hole’. This would not be a popular change with the huge number of employers who have spent time and money implementing such plans and explaining the benefits to their staff.”
 
“Best hope – a year of stability with no further changes."

Martha Grekos, partner and Head of Planning at Irwin Mitchell in London, added:

“George Osborne will announce a new Conservative budget based on the party’s manifesto come 8 July 2015. This will give the new Conservative government the chance to set out their own policies based on its electoral mandate unlike the last five Budgets which have been devised by the coalition.

“A series of measures to ease the shortage of housing and to promote infrastructure were announced in the March 2015 budget, but these failed to address some of the real issues holding back economic growth. We would like to see clearer thinking in delivering housing (not just making it easier for first-time buyers to purchase) and strong measures that will stimulate and support spending on critical infrastructure.”