Enough Already…

I will not be the only one pleading for Alistair Darling today to simply leave pensions alone in his Budget. Untold damage has been done to the UK pension system by years and years of tinkering with, raiding from and knee jerk responses to occupational pension provision.

Enough is enough, the pips are sqeaking, we cannot take any more. But sadly much as we would like to see it, I suspect that our pleas will fall on deaf ears. There is very little possibility that the changes already announced for Higher Rate taxpayers will be reversed, even though it is likely that even modest earners could be affected by them. It is a rare policy that gets ‘U turned’ once announced.

The only real hope is that this Budget will to all intents and purposes be a sham in that within 2 months, we will have another administration in place with different ideas. Well, that’s the hope, but how many times have we seen bad policy continued even after a change in Government simply because it’s the ‘easy’ route and they’ve got at least 4 years to worry about it. By then, it’s embedded and too late to change. I’ll update this later once we know a bit more.

I used to believe in the Mother of Parliaments as essentially a place where on the whole good was done by well meaning people. Now, I really don’t think that at all…

LATER:

Well, the pensions announcements were pretty low key and in fact mainly turned up in the Budget Papers. More consultation on removing the default retirement age which comes as no great surprise. The Lifetime and Annual Allowances limits below which no additional tax charges attach are frozen for the next 5 years. Great if inflation doesn’t take off but not something to be overly happy about to be honest. Especially for young professionals and entrepreneurs whose income tend to rise rather quickly – and don’t we really want to encourage that sort of growth right now?

Some more tinkering with Trivial Commutation too. This could be a bit of good news in fact although we can only hope that any introduction is made rather more efficiently than the last set of regulations – I almost lost count of the number of amendments that needed to be made to the first effort!! HMRC are clearly still nervous that TC can be used as some sort of tax avoidance measure and have made it clear that they will not countenance any iffy transactions. They have though mentioned the possibility of ‘pooling’ the trivial pots of partners to allow the purchase of joint annuities. Interesting.