Recently appointed UK chancellor of the exchequer Phillip Hammond is to make his first Autumn statement in the UK’s House of Commons on 23 November.
Some commentators are insisting that pension reforms set out by the Treasury should be high on his agenda. However the probability of the UK Government cutting pension tax relief this year has been reduced, given the top level personnel changes that followed Brexit.
The UK Government confirmed that the Autumn statement will take place on 23 November – its first major Treasury spending announcement since the shock Brexit vote and subsequent change in leadership with the Conservative party. The Treasury announced yesterday that Hammond’s first Autumn statement will also be accompanied by forecasts for the economy and public finance for independent.
But it is the questions surrounding pension reforms, started by previous chancellor George Osborne, that the UK financial services industry is particularly keen to see resolved, with dramatic change still needing to be embraced, according to UK pensions specialist AJ Bell.
‘Future of UK pension tax relief’
AJ Bell said that it believes that despite such events usually being preceded by fervent rumour and speculation about the future of pension tax relief, this Autumn shouldn’t spring many surprises. With the Treasury’s consultation on reforming pension taxation still awaiting an official Government response, AJ Bell senior analyst Tom Selby said that despite the changes being unlikely this time, there should change in the near future.
“George Osborne temporarily shelved a dramatic overhaul of pension tax relief at the last budget for fear of rocking the boat ahead of the EU referendum,” said Selby. “His plan didn’t quite work out, but proposals for radical reform – and potentially the creation of a Pension ISA – are not dead in the water.
“The creation of a new Lifetime ISA could well be the first step towards either a Pension ISA or the introduction of a flat rate of pension tax relief. However, given the ongoing uncertainty surrounding the details of Brexit, chancellor Hammond may decide now is not the time to stir up that particular hornets’ nest.”