The headline news out of the Budget will be that the Government has listened to the industry and realises that time will be required if we are to implement retrospective pension changes properly.
It is particularly important that people affected adversely by the changes are able to receive appropriate advice and that pension providers and employers also have sufficient time to implement these changes before A-Day.
Setting the implementation date at April 6, 2006 instead of 2005 should allow enough time but only if all of the details of the changes are published soon. Many Budget commentators often fall back on the phrase “the devil is in the detail” when asked for their initial reactions to the Chancellor's speech but for pensions in this Budget, the opposite is true – the devil is in the lack of detail.
It is important that Government departments do not sit back and relax now in the belief they have more time on their hands with the drafting of the pension legislation. They don't.
For the last year, we have experienced what amounts to a pension blight.
To use the extra time gained by postponing A-Day until 2006, we need to have full details of the changes to our legislation straight away, all the i's dotted and all the t's crossed. Then we can all get on with it.
The lifetime allowance of £1.4m that was proposed when A-Day was going to be in 2005 is being increased to £1.5m to “reflect an April 2006 implementation date”. The Government has also announced all the limits that will apply up to 2010, when the lifetime all-owance will be £1.8m.
That seems to me to be well above what we would have expected in terms of the rate of increase in the allowance and seems to indicate that Government agrees the £1.4m was a bit on the low side.
The lifetime allowance itself will be subject to a five-yearly sense check, with the first review being in 2010. That is good too and shows that the industry's views have been taken on board.