This year could see five key changes to pensions ranging from the state pension debate to the lifetime allowance abolishment.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said over the years, there have been some big changes to pensions.
But she said "2024 could see the foundations laid for some truly huge developments".
- The state pension will increase.
Pensioners will get an 8.5 per cent boost to their state pension from April.
After a year of high prices and squeezed budgets, this increase will be welcomed by many.
“With this being the second largest increase in a row, debate over how to contain the burgeoning cost of state pension will continue with calls to reform the triple lock,” Morrissey said.
“As we head towards a general election it will be interesting to see whether maintaining the triple lock forms part of any of the key party manifestos.”
- Lifetime allowance
The lifetime allowance is due to be abolished from April 2024 and is “great news for those with large pension pots” who faced tax charges if they breached the £1,073,100 limit.
Morrissey said although its removal sounds easy in practice, the reality is that the industry has to get to grips with a complex set of rules before this can happen.
“The other concern is that Labour has said they will reinstate the allowance if they get into government though it is to be hoped that their stance will soften in the coming months,” she said.
- Lifetime pension
Morrissey explained that the lifetime pension took centre stage in the Autumn Statement and these reforms would allow people the right to ask their employer to pay pension contributions into the pension of their choice.
This could go a long way towards solving the issue of lost pensions and puts the member firmly in control of their own pension planning.
It will, however, take some time to work through so Morrissey said they may not be introduced any time soon.
“The good news is that you can take steps today to take control of your pensions,” she said.
“Using the Pension Tracing Service to track down lost pensions could leave you much better off in retirement and you can make them easier to manage by consolidating them into a pension such as a Sipp that offers you more options.”
She added: “The lifetime pension will give members extra choice in building pension savings on their own terms while helping combat the issue of lost pots and the lifetime allowance moves ever closer to the exit.”
- Extension of auto-enrolment
Morrissey said she had hoped to see a timetable for the extension of auto-enrolment in the Autumn Statement, but it was absent.
Lowering the minimum age from 22 to 18, and allowing contributions from the first pound, will help more people build bigger pensions, particularly women and people in part-time work.
“The Bill received Royal Assent in the Autumn, but we’ve seen no progress since,” she said.
