Chancellor Philip Hammond’s decision to move the main Budget to the Autumn will provide welcome breathing space from the “thick and fast” pension policy changes of recent years, Prudential has said.
Head of technical Les Cameron (pictured) said advisers were still trying to keep up with existing legislative changes, with Prudential’s helpline receiving about 12,000 calls a year.
Hammond announced on 23 November he would switch the two Budget events around but use the Spring Statement merely to respond to forecasts from the Office of Budget Responsibility.
He would not use it to make any changes unless there was a “major fiscal event”, he said.
Cameron said: “I think this will bring a nice rhythm to industry legislation and give breathing room to policy changes we’ve had so far.”
‘Benign’ Statement
Overall, this year’s speech was considered “dull” by advisers, who will be affected by relatively few of the Statement’s policies.
Cameron said: “It was relatively benign, as we knew a lot about what was on the agenda already.”
However, he said the “light” level of content was both the low and high point of the statement, as it meant the industry was avoiding further complexity.
Among the measures announced was the introduction of a new three-year National Savings & Investment (NS&I) bond paying an interest rate of 2.2%.
Cameron said: “Anything that promotes a good savings culture is positive.” The “modest” interest rate was reflective of the current savings environment, he said.
Cameron also highlighted Hammond’s proposed crackdown on cold-calling, which will see the government put a ban on callers and impose fines of up to £500,000, as a particularly positive step.
However, he said the planned reduction of the money purchase annual allowance (MPAA) from £10,000 to £4,000 was problematic and would make financial advice on pension contributions more complicated.
Hammond had introduced the measure to “prevent inappropriate double tax relief”.
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