2016 is set to revolve around two big set-piece events for the world of politics.
Firstly, the Budget of 16 March will finally see the first conclusions presented from the FCA and the Treasury’s work on the Financial Advice Market Review.
Already dominating the thoughts of many experts last year, FAMR’s consultation ended on 22 December, with the project aiming to provide initial proposals ahead of Chancellor George Osborne’s arrival at the parliamentary dispatch box.
Osborne has also pledged to provide an update on the Government’s review into pension tax relief, while policymakers are also investigating the possibility of rationalising the existing pension guidance framework.
Hargreaves Lansdown head of retirement policy Tom McPhail says: “In one day we could see a fairly fundamental shift in how pensions are taxed, and much greater support for automation in providing advice.
“The latter might not actually make much difference for individual advisers, but at a business level it’s the sort of thing that could facilitate far greater customer engagement, particularly if it opens the doors for more information as distinct from advice.
“So the Budget is where we might start to see the big changes come.”
Hanover head of financial services Cameron Penny agrees: “FAMR and the outcomes from that, and the conclusions of the almost endless reviews of MAS and the guidance framework, could all be hugely important, and that’s all due in March.
“We are at a stage where everyone knows what the problems are, and there are a lot of ideas, but getting anything actually implemented has become the sticking point. Hopefully March will provide a point where some decisions are finally made on how to move forward.”
The second date is yet to be established, but pundits are increasingly certain Prime Minister David Cameron will push for a 2016 referendum on the UK’s membership of the EU.
The Conservatives promised a vote by the end of 2017, but have been widely predicted to target a trip to the polls this year. If the public vote to quit the EU, the repercussions for investments, regulation and the UK economy as a whole remain uncertain.
Cicero executive chairman Iain Anderson forecasts a September date for the referendum as “the most likely scenario”.
He says: “The trajectory that we understand at the moment is that there is going to be a summit in February which will be where EU leaders focus on the renegotiation.
“That means the renegotiation itself will probably need to be agreed by March, and at that point there will need to be something on the table.
“And that’s when we might start to see some of the Eurosceptics drop out of the Cabinet and out of the Government, and trigger a reshuffle.”
MRM head of public affairs Havard Hughes agrees, and argues the vote will expose divides between previously amiable Cabinet colleagues.
He says: “In many ways, the story of 2015 has been the divisions in the Labour party, but come 2016 the boot could be on the other foot when it comes to the EU referendum.”
While Lansons director Ralph Jackson agrees that both the Budget and the referendum will be important, he suggests broader areas of policy movement remain interesting.
He says: “Firstly, the approach to banking and the extent to which the further reforms follow the mould set by the Government’s action on implementing the Vickers ring-fencing proposals, which were watered down.
“Secondly, the focus on asset management with the FCA looking at business models. The outcome of that is very uncertain.
“And thirdly, the whole housing sector in terms of the potential for intervention in the buy-to-let market and the use of tax as an instrument to encourage certain types of behaviour.
“All of those areas could present huge challenges for advisers and intermediaries in 2016.”
Anderson adds that while the chances of opposition leader Jeremy Corbyn ever arriving as the new tenant of No10 Downing Street remain slim, the presence of the Islington North MP at the helm of Labour is nonetheless affecting the agenda for the current Government.
He says: “What it’s doing is it’s pushing the Chancellor to respond and he has responded with some quite consumerist approaches to policy which can be quite challenging for the sector.”