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Budget 2013: Adviser views

The review of drawdown

“It’s a quick and dirty fix to deal with the short-term concerns by raising the limit to 120 per cent. There is continued concern over the underlying calculation basis and the discrepancies that can emerge as a result of monetary policy. So I think it makes sense for GAD to review the calculations basis and look at whether a more fundamental change is required.”

Tom McPhail, head of pensions research, Hargreaves Lansdown

“It certainly makes sense. I know the recent changes have limited the scope for people to carry on taking the income they have previously enjoyed. I am always worried when I hear there is going to be an investigation, enquiry or a consultation on these things as they tend to end up not providing the results.”

Alan Lakey, partner, Highclere Financial Services

The Help to Buy scheme

“Initially, this is good but there are a few questions marks around the limit being £600,000. I am sure the cap does not need to be that high. Anyone whose property is in excess of half that value does not really need that much help anyway. That is out of first-time buyer territory.”

Peter Chadborn, director, Plan Money

“Any help that first-time and second-time buyers can get and move forward in the property market is great. However, many of the headlines that were introduced at the last Budget unwound quite quickly and I hope this isn’t one of them. I am minded of the 1998 property boom under Nigel Lawson and this proposal is so significant that I wonder whether it could produce another property bubble.”

Keith Churchouse, director, Chapters Financial

The reduction of corporation tax

“I can’t see anything specifically wrong with it but it is always a very difficult balance.Do you tax individuals or do you tax businesses? If you give away money by reducing tax at a point where we are already in fiscal trouble with all the borrowing and problems we have had, is this an appropriate time to do it or is it positioning for the general election?”

Lakey

“We are very much in favour of the low tax, no bureaucracy, growth focused economy and reducing corporation tax should undoubtedly be a part of it, so it is good news for businesses.”

McPhail

“What it is trying to do quite clearly is make Britain a better place to do business, not just for UK companies but for companies from outside the UK. I think within limited constraints, there has been quite a bit done there to improve conditions for business.”

Minesh Patel, managing director, EA Financial Solutions

Allowing employers to pass on the cost of abolishing contracting out

“Employers need some room for manoeuvre over this change for funding basis and there are some tough choices to be made there on whether they are going to ask employees to make higher contributions or whether they are going to water down the benefit structure, or indeed as I expect will be the case, many schemes will simply close for future accruals altogether. I think it is probably too little too late and schemes in the main will just close anyway.”

McPhail

“All that this is doing is giving them the green light to reduce scheme benefits so that when an employee complains the employer can then say, ‘George Osborne said it was fine’. Given what is going on with Nest, it is yet another area tocause confusion.”

Lakey

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