Budget 2015 (1): Pension changes

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We don’t have supporting Budget documents yet, but it largely looks like the two key pension announcements of the speech will follow the lines of this week pre-speech leaks.

They are:

1)  The Lifetime Allowance is to decrease from £1.25 million to £1 million. 

The actual date from when this change will apply was not provided in the statement, although the supporting document may (should?) flesh this out.

One small surprise here is that the new Lifetime Allowance will be indexed from 2018 onwards (so a sweetener to an otherwise negative policy for pension savings).

Annual Allowance is not to change.

My thoughts from earlier today on this change here:  On the way down?

 

2)  The extension of Pension Freedoms to those already in receipt of an annuity also announced.

This is a huge change which will potentially allow 5 million people the option of “cashing in” their annuity.  My thoughts on this issue from earlier this week here:  What price more freedoms?

 

More on the above, and any other Employee Benefits topics in the budget, once we have had a chance to study the supporting text and document.

Best regards

Steve

 

Wellbeing at WorkInternationalProtection/RiskWorkplace Pensions and SavingsWorkplace Benefits Platform

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About the author

Steve Herbert is an award-winning thought leader on Pensions and Employee Benefit issues. His principal aim is better communicating the value and usage of employee benefits to employers. This he has achieved through many (highly successful) seminar series over the last decade, and his regular and widely read blog posts on the subject.
He also acts as a judge in HR and Employee Benefits industry awards, article writer, and product innovator. Steve is a regular contributor to DWP forums and compulsive responder to formal Government Consultations on pension and employee benefit issues. He is occasionally accused of making employee benefits interesting.