Autumn Statement 2016
The Chancellor delivered his first, and last, Autumn Statement yesterday - from next year, there will be only one Budget exercise which will take place in the Autumn. The Statement did not throw up too many issues relating directly to pensions, but the key points to note are as follows:-
- Reduction in Money Purchase Annual Allowance from £10,000 to £4,000. This will affect you if you have, or intend, to take advantage of the pension freedoms by accessing a defined contribution (DC) pension pot and wish to continue to contribute to a DC pension. From next April the amount you will be able to contribute will reduce to £4,000. The change is subject to consultation, but you may wish to consider whether to access a pension now if you also planned to continue contributing elsewhere.
- Clamp down on Pension scams – The government will shortly publish a consultation on options to tackle pension scams, including banning cold calling in relation to pensions, giving firms greater powers to block suspicious transfers and making it harder for scammers to use certain pension vehicles. This should be a positive step in the right direction of stopping pension scams, and makes it clear that if someone cold calls you suggesting you transfer your pension, this could well be suspicious so be very cautious. If you have any concerns about a possible transfer, you should call TPAS on 0300 123 1047.
- Overseas pensions – The tax treatment of foreign pensions will be more closely aligned with the UK’s domestic pension tax regime and the government will update the eligibility criteria for foreign schemes to qualify as overseas pensions schemes for tax purposes. Transferring a UK pension overseas can be complex and is sometimes prone to pension scams. You should seek independent financial advice if you wish to transfer a pension overseas to make sure you understand all the implications, particularly with respect to taxation and options. Or speak to us if you would like to understand the options further.