Government notice period for private pension rules

whitehartal

Is there a "notice period" that any UK Government has to give if they were to bring in new private pension rules, for example changes to the 25% "tax free" allowance?

HappyHarry

No. They have made immediate changes in the past. 

tacpot12

HappyHarry is correct, but it is very unlikely that they would make any changes that would badly affect anyone approaching retirement at short notice. I think that Labour have learned the lessons from the Waspi ( Women Against State Pension Inequality) campaign and the event that triggered it.  

JoeCrystal

whitehartal said:

Is there a "notice period" that any UK Government has to give if they were to bring in new private pension rules, for example changes to the 25% "tax free" allowance?

Certainly not, rarely, but they have no problem applying changes retroactively, so technically, negative notice? 
The closest thing I can think of is the government's non-statutory "commitment" to the principle of providing ten years' notice of changes to the state pension age.

Andy_L

AIUI the 25% lump sum is in legislation so they have to change the law, which takes a certain amount of time. That's the minimum notice required legally

TheBanker

They are the government. They have a large majority. Even if there is a rule that says they can't do something, they can pass a law to change the rule.

But despite that I don't think they will make changes to the 25% tax free cash rule in a way that would impact people who are close to retirement. I don't think they'll make any changes in October, I think they'll wait for the Pensions Review. The changes in October will probably focus on things that can raise revenue quickly, such as reducing the Annual Allowance or re-introducing a form of Lifetime Allowance. 

Silvertabby

tacpot12 said:

HappyHarry is correct, but it is very unlikely that they would make any changes that would badly affect anyone approaching retirement at short notice. I think that Labour have learned the lessons from the Waspi ( Women Against State Pension Inequality) campaign and the event that triggered it.  

17 years between the 1993 Budget announcement that State pension ages were being re-equalised and 2010, when the incremental increases began.

Or 15 years from the well-publicised 1995 Pensions Act.

dunstonh

There is no expectation that the 25% tax free cash will be changed in the Autumn Statement
1) there have been two statements from Labour saying it wont be (although they have flip flopped on a few other things they said they wouldn't)
2) There is already a hard cap on tax free cash.  So, removing it won't hurt high earners.  It will harm smaller to medium-sized earners.
3) it is well known that lots of people use the tax free cash to repay their mortgages or other debts.  So, again, it would be harm those people.
4) It is one of the smallest costs to the treasury regarding pensions. However, if removed, it would be one of the most politically damaging.

Apparently, the Government have told the pension providers that they will not make the same mistake the Conservatives did with the rushed legislation, causing unintended consequences because no consultation period took place to identify issues.   The removal of the tax free cash would need time.   Remember that its not just on DC pensions.  You would need to remove it on DB pensions.   You also have historic pensions with protected tax free cash greater than 25%.

The Government have already said that there is going to be a pension review.  It would be strange to make a major change like that before a review has been carried out.  Especially while allowing products like the LISA to exist.

Sunnylifeover50plan

I am a digital subscriber to the Telegraph, and since we had a change in government there have been multiple daily "reports" presented as governmental options. Many of these are from thinktanks and should be taken for what they are but they do get a reaction from the readership. The problem is that we are starting to see people genuinely worried by what they are reading/ hearing, this can't be considered a good thing. Hopefully October will show the current administration's direction of travel.

Sea_Shell

Sunnylifeover50plan said:

I am a digital subscriber to the Telegraph, and since we had a change in government there have been multiple daily "reports" presented as governmental options. Many of these are from thinktanks and should be taken for what they are but they do get a reaction from the readership. The problem is that we are starting to see people genuinely worried by what they are reading/ hearing, this can't be considered a good. Hopefully October will show the current administration's direction of travel.

Well they have, themselves, stated that it will be "painful".    

So we just have to wait to see which 'kneecap' they take a bat to, or whose.   

DBdoobydoo

JoeCrystal said:

Peter999_2 said:

Let's face it, it's Labour.   They don't give a crap about the working man, just look at how they decimated final salary pensions.

Unfortunately they can literally do whatever they want as they are the government.   Hopefully people who voted them in are now realising just what they have done.   Turkeys voting for Christmas springs to mind.

Remember that we should not have political debates on this forum according to the rules, and your post didn't even answer the question in the first place. I think you meant that final salary pension schemes are going the way of the dodo since they are costly for private sector employers to operate, especially since the investment returns are nothing like the ones in previous decades. However, final salary pension schemes in the private sector are still around; SWR comes to mind for example.

It's not even necesarrily the cost of providing DB pensions but perhaps more importantly that private sector employers have realised that employees in general don't appreciate the value of DB pensions so they have been able to close company schemes without much complaint from the workforce. Theeir actions facilitated by the large decline in trades union membership over the last 30-40 years.