What's In Store For Pensions In The Chancellor's Autumn Budget 2017

7 November 2017

The Chancellors Autumn Budget 2017 With the Government set to unveil its first Autumn Budget on November 22, much of the talk about what Philip Hammond may do concerns pensions. We take a look at some of the possible ways pensions could be affected by the forthcoming Budget…

Will there be a reduction in the annual pension contribution allowance?

Successive Chancellors have shaved the amount that you can save into a pension from £255,000 a year in 2010-11 to today's £40,000. Doing so would raise a huge amount instantly, so it could very well be something that we see in the budget according to some industry commentators.

Could there be a reduction in the lifetime pension allowance?

The current lifetime allowance is £1 million. Whilst this figure sounds a lot, it actually only buys an annual pension income of around £45,000. The lifetime allowance (LTA) was introduced in 2006/7 at a figure of £1.5 million. It steadily increased to £1.8 million in 2010/11 and 2011/12 but since then has shrunk to £1 million. It is thought by most industry experts that a further cut is unlikely.

Is a reduction in tax relief on pension contributions likely?

Currently, pension contributions attract tax relief at the saver's highest marginal rate. There have been suggestions made that a tax relief rate of 30% would be fairer, though this is debated. It is thought by financial experts that such a move would be unlikely in this forthcoming Budget.

As with any Budget, it's a case of wait and see as to what the Chancellor will actually come up with and just how this many affect pensions, pensioners and pension schemes.

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    • Sp avatar Brett Cranfield

      Brett Cranfield, previously a Private Banking Manager for the UK Wealth division at Lloyds Banking Group, he managed a diverse portfolio …