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Pension rescue at the 11th hour

Just when you thought he didn’t care, Gordon has presented the final-salary pension victims with a great big bouquet of cash.

An extra £6bn is the headline figure for the Financial Assistance Scheme and this looks like the Government is genuinely taking its responsibilities seriously.

Could this possibly be linked to the fact that they are now going to try and sell us a new pension system – personal accounts? I think so. Restoration of trust is vital and it does not come cheap. The pensioners will not be complaining, though, as the FAS payments will now be broadly in line with the PPF structure.

It is strange though that the Government is still challenging the High Court’s recent ruling if they are now going to pay the cash out anyway.

Good news for pension advisers too, as the change to income tax rates will make pension saving even more attractive for higher-rate tax payers. Salary sacrifice is going to become more attractive too, given the vicious hike in National Insurance limits.

With the generous pension contribution limits introduced last year, I think that this Budget is broadly a positive one for pensions and it only took him 11 attempts to get it right.

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