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Trawling for gems: Leslie Gray, Scottish Mutual

With major reviews from Sandler, Pickering and the Inland Revenue expected in the next couple of months and an annuity consultation just closed, it never looked likely that there would be much in the Budget on financial services at least as far as a direct effect on providers is concerned. On this occasion, the predictions turned out to be correct.

There are some possible indirect effects. Public borrowing is set to increase which could increase the supply of gilts over time and take some pressure off annuity interest rates. There was also a reference to extra cash for small employers to help them put payroll on line which will be welcome news for providers trying to web-enable their pension scheme contribution collection.

Trawling through the Budget papers produced the odd gem. There is a reference to a consultation on the offshore funds tax regime to help reduce the red tape that investors must follow to secure compliance with the tax advantages and a technical defect in last year&#39s Finance Act concerning qualifying policies will be corrected to ensure that no-one is worse off as a result.

Apart from that, it is rather disappointing to see no real measures to increase savings especially given the Government&#39s expressed concern in the Budget papers about employers reducing their pensions contributions when they change from DB to DC. The increased employer&#39s rate on NIC will not help reverse this trend.

Leslie Gray is Scottish Mutual investment and pensions development director

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