Industry members have placed pensions high up on the wishlist for the chancellor Jeremey Hunt in his Autumn Statement next week.
After unexpectedly not being addressed in the King’s Speech on November 7, some have made predictions of what we can expect to see from the chancellor.
David Brooks, head of policy at Broadstone, said pension scheme investment in productive finance, the abolition of the Lifetime Allowance, and tax-breaks for ISAs could all be on the cards.
On his wishlist was for for more people to be brought into the auto-enrolment evolution to be included in the statement.
“The policy aim of auto-enrolment was to help the low- and median-income workers," he said.
“Pension saving may possibly not be right for them but to exclude so many seems an arbitrary way to determine if a pension, with employer contribution, is the right choice.”
Similar predictions were made by Isio head of research and development, Iain McLellan, who also said he expects the Lifetime Allowance to be fully removed.
“Maybe we’ll see the tax charge applied when surpluses are returned from defined benefit schemes to their sponsors reduced," he said.
“Given that the corporation tax rate stands at 25 per cent, there’s scope to make tax on surpluses a little less onerous.”
McLellan added that two other areas where new legislation is needed is “a formal regulatory system for superfunds and the broadening out of collective defined contribution schemes to cover decumulation only and multi-employer schemes”.
Additionally, Hymans Robertson partner, Kathryn Fleming, stated: “We’d like to see the government propose putting clear actions in place to ‘solve the decumulation puzzle’ facing both DC scheme members and trustees.
“It should encourage the industry to think innovatively to offer support for scheme members at the point of retirement.”
She advised that the “key channel” to achieve this would be through establishing a “broad alignment” amongst what is offered by different providers, compelling them to provide decumulation solutions for their members through all pension schemes.
The first step in this, according to Fleming, will be a requirement from the government for all DC trust-based schemes to support members in accessing the full range of pensions freedoms.
Mortgages
Meanwhile, Coventry Building Society head of intermediary relationships, Jonathan Stinton, called for more support for first time buyers in the statement.
He commented: “If the property market is going to remain stable it needs to stand on firm foundations - a fundamental element of that is a functioning first time buyer market.”
Stinton explained that every new buyer who steps onto the property ladder will give it added “strength and stability” and, without them, the ladder would be “top heavy and volatile”.
To address this, Stinton advised that the Chancellor shouldn’t neglect to help those looking to step onto the ladder, and that the aim should be building long term stability.
