Budget 15th March2023, any pension changes predictions or views?

RogerPensionGuy

Hi.

Reference the title above, I've been reading plenty of media outputs on possible pension changes.

I'm lucky enough having a good DB and DC pension schemes at my finger tips and also just over the LTA currently at this point in time.

I'm still in a moderately well paid job and still putting cash in the DC scheme, I'm 61 and will probably stop paid employment inside the next 1 or 2 years, I'm just one year short of full state pension at April 2023.

Over the last few years my view has been to get to the current LTA and sorta happy to go over LTA by about 10/15% and just manage it best as possible down the road.

I'm trying to wait patiently for the next budget but unhappy it's just 3 weeks before fiscal year end/start. 

It could be impossible that trying to activate pension stuff on the 15th or 16th that it wouldn't complete by the 5th of April.

I'm still just guessing what or any changes government will make but, I'm interested in any views on here.

I'll list my pension guess options below with a big pinch of salt, any other views most welcome plants. 

1. LTA will start being raised very soon to maybe 1.3M straight away and then on an inflation index or similar or maybe just starts going up this April on such an index.

2. MPAA to 10K in April. 

3. AA to 30K PA in April. 

4. Input tax relief to 30% in April for all.

5. Tax-free 25% will be reducing in April. 

6. Various protections will be enabled allowing old or current rules to be applied for people with well established pension plans and schemes. 

I'll await any views with great interest, TIA.

westv

25% tax free lump sum removed totally from 9pm 15th March.
Pension providers will crash as clients rush to beat the deadline.

But on a serious note, I don't think anything will change.

retiringtoosoon

salary sacrifice abolished.
LTA reduced to £500k.
AA increased to £60k!

dunstonh

Reference the title above, I've been reading plenty of media outputs on possible pension changes.

You mean the stock articles they publish around each budget and repeat because they never get it right?

5. Tax-free 25% will be reducing in April. 

Media has been speculating on that one for 35 years.  Yet both Labour and Conservatives have increased the availability of tax free cash over the years.      It is one of the smallest costs to the Treasury in respect of the pension tax benefits.   And it has a significant knock on effect to the wider economy.

The LTA is a bad policy.  However, increases would be jumped on by Labour as favouring bankers.  Even though its mainly public sector workers who will benefit and a change is needed to prevent problems in the NHS.

Most pension legislation is primary and cannot be adjusted quickly.   

I am not expecting much in the way of changes apart from perhaps the LTA if Hunt can be sensible and decide to switch to growth instead of the managed decline route they are currently taking.

Simon11

https://www.bbc.co.uk/news/business-64789405

This has some decent gossip which is usually on the right path:

The state pension age could rise

Currently, men and women can start drawing their state pensions when they turn 66.

That is due to gradually increase to 67 between 2026 and 2028, and to 68 from 2044-2046.

But reports suggest a review into the state pension age will recommend that the increase to 68 be moved forward to the mid-2030s.

If true it would mean millions of workers born in the 1970s would have to push back their retirement plans.

It comes as Mr Hunt is trying to lure people over 50 back to the labour force to tackle worker shortages in many industries.

The tax-free allowance on pensions could rise

Currently the so-called lifetime allowance - how much you can save in your pension pot before being hit with a tax charge - is £1.073m, a level it will be frozen at until 2026.

With pensioners more likely to be dragged into paying tax, some may retire early, something Mr Hunt doesn't want.

He told older workers in a speech last month that "we will look at the conditions necessary to make work worth your while".

molerat

The long overdue axing of voluntary class 2 contributions ?

Albermarle

RogerPensionGuy said:

Hi.

Reference the title above, I've been reading plenty of media outputs on possible pension changes.

I'm lucky enough having a good DB and DC pension schemes at my finger tips and also just over the LTA currently at this point in time.

I'm still in a moderately well paid job and still putting cash in the DC scheme, I'm 61 and will probably stop paid employment inside the next 1 or 2 years, I'm just one year short of full state pension at April 2023.

Over the last few years my view has been to get to the current LTA and sorta happy to go over LTA by about 10/15% and just manage it best as possible down the road.

I'm trying to wait patiently for the next budget but unhappy it's just 3 weeks before fiscal year end/start. 

It could be impossible that trying to activate pension stuff on the 15th or 16th that it wouldn't complete by the 5th of April.

I'm still just guessing what or any changes government will make but, I'm interested in any views on here.

I'll list my pension guess options below with a big pinch of salt, any other views most welcome plants. 

1. LTA will start being raised very soon to maybe 1.3M straight away and then on an inflation index or similar or maybe just starts going up this April on such an index. As Dunstonh has said, you can see the headlines now ' Hunt tax break for millionaire pensioners' 

2. MPAA to 10K in April. Would make sense 

3. AA to 30K PA in April. Possible, but unlikely

4. Input tax relief to 30% in April for all. Too complicated to implement, in the short term at least and could be expensive

5. Tax-free 25% will be reducing in April. No possibility, too unpopular.

6. Various protections will be enabled allowing old or current rules to be applied for people with well established pension plans and schemes. 

I'll await any views with great interest, TIA.

There is always noise before a budget, usually about stopping 40% tax relief. However there has been some chatter this time about the generous tax treatment of pensions at the end of life, mainly benefiting the relatively well off. No IHT , no tax on some beneficiary pensions etc.
Maybe a review will be announced ?

The_Green_Hornet

I predict that the media will publish all sorts of scare stories and none of them will come true.

mark_cycling00

I could imagine a "nice sounding" announcement such as all Pensions must invest 5% in new renewable energy projects.

That would tick a few boxes but also initiates the concept of the state dictating how your retirement is invested. Soon your pension could be forced to fix all the mess that each successive governments create. 
 
Not sure what the chances are.

Currently, the economy has picked up and is only heading for a mild recession, so Hunt may not want to do anything major

NedS

What I think should happen:

LTA to increase by 10.1% in April and thereafter by CPI inflation.

They need to address the LTA for those who have already retired and hit 100%. An increase in the LTA in April doesn't help them (thinking NHS consultants etc). So for those who have already used 100%, they can also benefit from the monetary value of any rises (10.1% of £1,073,100) and any increases thereafter.

What I would like to see happen:

Abolish salary sacrifice and make a flat rate of tax relief for everyone at 25% or 30% depending how the sums stack up. This could be cost neutral and benefit lower/average earners encouraging them to save more for retirement. Unlikely to happen under a Tory government as it would likely disproportionately hit their voter base. Very unlikely to happen in April as it would constitute major reform and likely require much consultation.

What might need to happen:

Rather than constantly raising State Pension Age, I would prefer to see the State Pension means tested like Child Benefit, where it tapers off for people with pension income between £50k to £60K - so it effectively tops up anyone's income to £60k if they have pension income between £50k to £60K, but is completely removed for those with pension income about £60k (or set your own limits as you feel appropriate). I feel continuing to push back the state pension age is advantageous to the wealthy/healthy who are statistically more likely to live longer and disadvantages the less wealthy/healthy who are statistically less likely to even reach state retirement age.

MX5huggy

Abolish employees NI and set Income Tax at 32%, 45% and 50%.