Budget 2018: What Does it Mean for Pensions?

Pensions were by no means a major area of focus for Chancellor Philip Hammond as he made his recent Budget speech to the House of Commons but there were nonetheless some noteworthy pensions-related revelations.

Pension tax relief to remain unchanged

There had been suggestions prior to the late-October 2018 Budget that pension tax relief would be cut by the chancellor in an effort to balance his books. However, in the event, Mr Hammond was able to keep silent on the subject which would have been welcomed as good news for retirement savers in general around the country.

Commitments made on the Pensions Dashboard

An area where the government did make a firm commitment in the recent Budget was in the context of the Pensions Dashboard, which will aim to bring together a wealth of currently disparate information on retirement savings and pension planning into a single online location.

A sum of £5 million was promised by the chancellor in support of the Pensions Dashboard initiative, with the aim being to see it up and running and in use by consumers across the country before the end of 2019.

It’s also been confirmed that state pension information and details will form part of what’s made available to anyone using the dashboard to manage their savings and pension plans.

Auto-enrolment charge cap to be reviewed

Plans have been put in place for the government to review the thinking behind its 0.75 per cent charge cap on automatic enrolment pensions during 2019. The decision to conduct the review has been taken “to ensure it does not unduly restrict the use of performance fees within default pension schemes”.

Details are yet to emerge on what the government’s position might eventually be on the charge cap on auto-enrolment pensions but the aim will be to make sure that investments made in these contexts are able to offer reliably good value for money.

Clampdown on cold callers

Another step being taken by the government with relevance to pensions and retirement savers relates to the issue of cold calling and what are called ‘lead generation’ companies.

Plans are in place to better equip the Information Commissioner’s Office (ICO) with the regulatory tools it needs to clamp down on cold callers whose aim is essentially to scam and defraud people out of their hard-earned pension pots.

The issue has become particularly significant in recent years since the government legislated to give people approaching retirement age across the UK the freedom to access their savings pots in full at a much earlier stage in life.