As previously announced, any major changes on pensions tax relief will not be confirmed until the 2016 Budget. The Chancellor has however taken the opportunity today in his Spending Review and Autumn Statement to confirm some fairly minor housekeeping changes including:
- delaying the increases in minimum contribution rates for automatic enrolment from October 2017 and 2018 to April 2018 and 2019;
- enabling the Finance Act rules on bridging pensions to be aligned with the new single tier state pension from April 2016. Hopefully this will give schemes the opportunity to amend their rules, if desired, to provide bridging pensions which dovetail with the new state pension regime;
- simplifying the test for the payment of a Dependant's Scheme Pension; and
- confirming that legislation will be introduced to ensure that inheritance tax will not be payable when a member dies leaving undrawn funds in a drawdown pension.
In addition, the government will be publishing details of the secondary annuities market in December. It is still anticipated that this will go live in April 2016. And the Chancellor is still looking at salary sacrifice - further evidence is being gathered.
The basic state pension from April 2016 has been confirmed at £119.30 per week and the new single tier state pension at £155.65 (for those who qualify).
On a perhaps worrying note, the DWP will be spending 22% less on administration (which presumably will include staffing) and 34% less on technology.
Changes are also afoot with the introduction of pooled investment in the LGPS. My colleague John Hanratty will be considering this in a separate briefing.
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