Philip Hammond's Autumn Statement speech was a relatively quiet speech on pensions for once - refreshing and to be welcomed given recent years.
Consumers are still getting used to the Freedom and Choice reforms announced in the 2014 Budget and trying to understand the new world, but the government is yet to push through all the reforms that are needed to improve consumer protections with all this added choice – for example the Financial Advice Market Review recommendations.
I was extremely pleased to see the government is planning to introduce a ban on pensions cold-calling. This is a big step forward in consumer protections and should help safeguard people from falling prey to scammers and potentially losing thousands of pounds of their hard-earned savings.
Financial Conduct Authority rules restrict legitimate firms from cold-calling consumers so people should be on their guard if they’re contacted out of the blue about releasing money from their pension pot or accessing their pension early.
The Chancellor also announced the Money Purchase Annual Allowance will be reducing from £10,000 to £4,000 for those already taking income, however it is likely this will only impact a minority of pensioners.
Extending the triple-lock to the end of this Parliament will be a reassurance for those dependent on the State Pension. However, it seems that further reform is likely, so we still need the government to focus on encouraging consumers to save into their own pension to ensure they can live comfortably in retirement.
More widely, at LV= we welcome chancellor Hammond's support for the Ministry of Justice's consultation on fraudulent whiplash claims and look forward to working with Government on implementing the reforms.
Honest motorists and businesses should not have to keep paying the price for unnecessary whiplash claims. The UK is known as the “whiplash capital of the world” so it’s vital that government implements these proposals without delay to ensure consumers can start getting a fairer deal as soon as possible.
However, on Insurance Premium Tax (IPT) government has incorrectly stated that IPT is a tax on insurers. It’s not - it’s a tax that consumers have to pay when they purchase insurance.
This is now the third IPT increase in a row, so it’s extremely disappointing that the Treasury appears to be setting a precedent of placing an ever-increasing burden on hardworking consumers.
Overall though, I was pleased to see the Chancellor’s monetary policy recognising the impact of the vote to leave the EU. The insurance market has faced challenging economic conditions this year with Solvency II, low interest rates and market volatility.
We hope that next year things will be smoother as this should allow insurers to offer better rates and better value products for retirees, helping them get the most out of their pension savings.
