Chancellor Philip Hammond has been warned to leave pensions alone ahead of next week’s Autumn Statement.
The Autumn Statement will be delivered on 23 November and will be Hammond’s first since he took over from George Osborne in July. Hammond has already mentioned an intention to scrap the statement altogether, saying he wants to move away from “gimmicks” and micromanagement in the second main fiscal forecast of the year.
Autumn Statement and Budget announcements under Osborne’s watch included sweeping reforms such as pension freedoms and the creation of a secondary annuities market, the latter of which has recently been scrapped.
Away from pensions, Aspect8 chartered financial planner Claire Walsh says changes to the dividend allowance deserve more publicity. In April, a £5,000 tax-free dividend allowance was introduced but there are concerns those on the threshold of tax bands could end up paying more in tax.
Walsh says: “I was talking to an accountant and she was saying so many small business owners are unaware they will have to pay an extra few thousand pounds in tax. It has skirted under the radar. I would like to see them change that.”
Yellowtail Financial Planning managing director Dennis Hall does not want to see any changes to enterprise investment schemes, which give tax relief to investors who buy shares in smaller higher-risk trading companies.
But he would like to see more of a “push” on peer-to-peer investments.
Hall says: “Peer-to-peer is not protected in the same way that other investments are but there will be a lot of people wanting to invest in those things, particularly through their Isa.”
After the Treasury backed away in September from plans to introduce a secondary annuities market, there has been much speculation around whether the Lifetime Isa – another of Osborne’s pet policies – could be the next to go.
But Hargreaves Lansdown retirement policy head Tom McPhail expects Hammond to stick with the product.
McPhail says: “With all the talk about intergenerational inequality, it would be a hard one to ditch. The legislation is well on its way through parliament, it has been through committee and is heading towards its third reading.”
He predicts announcements around pension tax allowances are more likely in the Spring Budget next year.
McPhail says: “There could be more tinkering at the margins, for example on the annual allowance or the lifetime allowance, or possible something more substantial, such as the fundamental principles of tax relief. Either way, I don’t think we’ll see a lot in this Autumn statement; it feels too soon, so at most just possibly the announcement of a consultation.”
Apfa director general Chris Hannant wants to see the statement give some clarity on the direction the Government is headed following the EU referendum.
He says: “This is the first time the Chancellor has got up since the [EU] referendum in the summer, there have been hints at a new approach to fiscal policy so getting sight of what that means for the country’s finances over the next few years has more of a bearing on what [our] members advise on.
“Everyone wants the economy to be doing well, not just for the investments that clients have but a growing economy is good for everyone.”
Both Hannant and Walsh are clear they want to see no further changes to pensions policy.
Walsh says: “No more tinkering with pensions please, leave pensions alone.”