George Osborne will take to his hind legs later this week to deliver his autumn budget statement. But will there be any significant announcements regarding employee benefits included in the speech, and if so how much weight should employers and the industry give any such proclamations?
For surely the principal factor here is not the statement, but instead the proximity of the next general election. With the exception of announced changes to tax rates and thresholds (which can of course have an immediate impact on pensions), it’s likely that most other benefit announcements will be ones that will only take place after the next Government is formed, and with the main Westminster parties in flux at the moment it’s very hard to tell whether any such promises of policy intent will actually make the statute books.
That said, there are three key areas that I expect at least mentioned, if not further policy announced. They are:
- Pensions: Progress on the Freedom of Pensions proposals (due to come fully into force around the time of the general election) will surely be covered – not least as it’s seen as a major vote-winner for the coalition parties. It will be interesting to see if the proposed rules are to be tweaked to avoid pensions being used as a remuneration option for older workers.
- Tax Free Childcare: Another policy due to commence next year (this time post the election) is the replacement to the current Childcare Vouchers system of state support for working parents. There have been several interventions into this debate recently (notably by employer organisations the CBI and the British Chambers of Commerce), and this may spark perhaps some further announcements here? If nothing else, I expect a statement confirming the timetable for the already announced policy to be made.
- The Fit for Work service and the medical intervention tax-break: The Government have seen slow progress on the above, yet both are due to be live by April 2015 nationally. I fully expect a brief mention of these issues to be made.
So plenty of areas of interest regarding employee benefits – but perhaps not much radical change from that previously announced? That said, no commentators predicted the (frankly huge) Freedom of Pensions changes in the spring budget, so perhaps another surprise may occur? If there were to be a major change announced, then it is most likely (again) to be pensions focused. Annual and lifetime savings limits, higher-rate tax relief and Tax Free Cash at retirement are always potential targets. Or maybe the Chancellor will announce further change to Individual Savings Accounts (ISA’s), which are increasingly being considered as a workplace savings option (and in some cases an alternative to offering pensions alone)?
But let’s hope that big policy announcements in this space are limited, as both employers and the benefits industry need time to adjust to everything that has occurred so far in this parliamentary term. That said, I would not be at all surprised to see some more radical statements in the spring 2015 budget – when all the political parties will be publishing their manifestos and blatant electioneering will be much more evident.
As ever, will keep you posted both here and at our 2015 events.