With the triggering of Article 50 on the horizon, it’s unsurprising the focus was on the economy today and we didn’t see any further reforms in areas such as pension.
The changes to the Money Purchase Annual Allowance will be introduced as previously expected and the Government provided an update on the positive work it is doing to tackle pension scams but otherwise it was relatively slow day – certainly compared to the 2014 and 2015 Budgets.
There was speculation before today that social care would be a major feature in the Budget and we did see the Chancellor focus on this through an increase in funding but also with an announcement that a Green Paper will be launched later this year.
This review is welcome news as some of the previous initiatives proposed to reform to care system wouldn’t have worked for the whole population.
We hope this will deliver a sustainable care system that is fully understood by the general public both in terms of what the state funds and when private provision is needed.
The Green Paper could be an ideal opportunity to encourage people to save for their care costs in their retirement and therefore reduce pressure on the State.
For example, this could be an opportunity to introduce a flat rate of tax relief for pension savings and remove the lifetime allowance – both of which would make the pension system easier to understand and encourage more people to save.
Given the timing of the Green Paper, one could speculate the Autumn Budget might be a significant one for both social care and other areas of financial services.
While it may seem like a quiet day for many of us in financial services, it is also worth remembering that we still have a great deal to get on with around the implementation of the Financial Advice Market Review recommendations to ensure the mass market can access affordable advice.
We also have the delivery of the ‘Pensions Dashboard’ prototype later this month, which is a huge step forward in allowing consumers to see all of their pension provision in one place.
The Pensions Dashboard is a much needed, and long overdue, service and Government and industry must keep up the momentum to ensure this is delivered without delay.
Phil Brown is head of policy for LV=
