Wednesday, March 11, 2020

Budget pension changes: Are there any changes to pensions in Rishi Sunak’s budget?

Chancellor Rishi Sunak delivered the Budget in Parliament this afternoon, introducing a raft of changes. Top of the agenda was the coronavirus outbreak, as hte Chancellor also pledged a £30 billion package to stimulate the economy to protect jobs and livelihoods against the coronavirus crisis.

Mr Sunak said his Budget’s measures to cope with COVID-19 “will make the UK one of the best placed economies in the world to manage the potential impact of the virus”, Downing Street said before his speech today.

The Chancellor acknowledged the British people were worried about the threat posed by the virus “but they are not daunted”.

Among the other changes announced were an end to the tampon tax, the National Insurance threshold was increased and he pledged a £3,000 cash grant to businesses eligible for small business rates relief.

He said: “I know how worried people are. Worried about their health, the health of their loved ones, their jobs, their income, their businesses, their financial security.

“And I know they get even more worried when they turn on their TVs and hear talk of markets collapsing and recessions coming. People want to know what’s happening, and what can be done to fix it.

“What everyone needs to know is that we are doing everything we can to keep this country, and our people, healthy and financially secure.”

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Are there any changes to pensions?

Chancellor Rishi Sunak said the tapered allowance threshold for pensions tax relief will increase to £200,000.

This means individuals with income below this level will not be affected by the tapered annual allowance.

The annual allowance will only begin to taper down for individuals who also have an adjusted income of more than £240,000.

Svenja Keller, head of wealth planning at Killik & Co, said “The change to pension rules for doctors – with more clarity and support for their Annual Allowance conundrum – is great news and, at long last, should be a significant boost to frontline healthcare.

“That said, by trying to help NHS doctors the increase in allowance threshold is now applicable to everyone. Why not just abolish it? This would have brought far more simplicity and the threshold is now so high that it will take many out of the tapering regime regardless.”

Priort to today’s budget, the Chancellor told the Cabinet that despite coronavirus being “front and centre in our minds” the Budget also “delivers on the promises made to the British people – investing in public services and cutting taxes for millions of hardworking people – and that there could be no delay in laying the foundations for a decade of growth where opportunity was spread equally across the UK”.

A Downing Street spokesman said: “The PM said that this Budget starts to tackle head-on the challenges facing our economy and country – addressing productivity and regional imbalances – and showing that the government is responding to the public’s desire for change.

“It will set the path for further action through the year.”

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