Broadstone comments on the pensions implications of the Summer Budget

08/07/2015

BROADSTONE

David Brooks, Technical Director at Broadstone, comments on the implication of the Budget for pensions:

“The desire to create some goodwill with an inheritance tax hike has resulted in more complication for the pensions industry. The creation of new Pension Input Periods and mini-tax years will be an administrative headache which will be tricky to explain to members and end up being cost neutral. George Osborne did well to avoid addressing the complication head on during his Budget speech.”

 

John Broome Saunders, Actuarial Director at Broadstone, comments on the Chancellor’s Green Paper:

“The Chancellor has clearly taken heed of previous criticism that some of his earlier pension reforms (such as removing the requirement to buy an annuity) were implemented too hastily. The Green Paper essentially asks the rather open-ended question ‘What should we do about pensions?’. Clearly any change that accelerates tax receipts (such as taxing contributions, rather than payments) is music to Treasury ears, but the consultation document does seem to express genuine concern that the current perceived complexity of pensions acts as a disincentive for many. However, the paper makes no attempt to address what could be the real headache of any change – namely how to cope with the messy transition between two quite different approaches.”