InvestAcc Pension Administration

Log In to Online Services | Sign Up to our Newsletter

News

Budget – 18 March 2015

Monthly Budget

The Chancellor, George Osborne, delivered his sixth budget speech today, the last before the general election on 7th May 2015.

In perhaps a surprise move, he announced a policy first broached by the Labour Party earlier this month – a reduction in the Lifetime Allowance from £1.25M to £1M. This change will bring more individuals, including long serving teachers, nurses and police officers who are members of public sector pension schemes, within the scope of lifetime allowance tax charges.

Whilst £1M is a large amount of money, according to Investors Chronicle, based on current annuity rates this could be breached by those retiring with an index linked pension of around £26,000 per year. On a slightly positive note, the Lifetime Allowance will increase in line with inflation from 2018 and there will be a mechanism for those who already exceed the new threshold to keep the current level.

There was also an announcement that might allow some pension flexibility to those that have already locked into an annuity. The proposal suggests that it may be possible to sell an annuity in payment to another party, with the annuity provider’s agreement, from April 2016. 

March 18th, 2015