Former chancellor George Osborne will be remembered for monkeying around with pensions, in particular for ushering in pensions freedoms that were announced in 2014 implemented the following year.
Philip Hammond didn't do too much on pensions in his Autumn Statement in November. So what was he up to today?
1 – Quiet day
Beancounters EY summarised Hammond's pension policies quite succinctly. Insurance director Jason Whyte came up with the title "All quiet on the Westminster front" and added:
In stark contrast to his predecessor’s radical changes, Philip Hammond’s first and last spring Budget left insurance and pensions well alone.
2 – Pension tax relief
There were some concerns the chancellor would start meddling in pension tax relief. Luckily "simple" was the name of the game.
Tom Selby of AJ Bell said: “It is a welcome relief the chancellor managed to resist the elixir of the pension tax relief honey pot. Any action here would have been a retrograde step at a time when people need as much encouragement as possible to save for their retirement.
Whether this is evidence of a chancellor putting an end to incessant tinkering and taking a long term view or simply a stay of execution remains to be seen.
3 – Money purchase annual allowance (MPAA)
Hopes were raised that the chancellor would bin plans to cut the amount that can be contributed to your pension each year. Today, they were dashed.
John Wilson, JLT Employee Benefits' head of technical said the decision "sends out the wrong message" and conflicts with initiatives to encourage people to save more for older age.
Old Mutual's chief pensions boffin Jon Greer agreed, he said:
The government had an opportunity to repeal the reduction to the money purchase annual allowance (MPAA). By confirming it, they’ve stuck to a proposal that is at odds with the current trends developing in the retirement market and the spirit of pension freedoms.
Meanwhile Kate Smith reckoned this could be a sign of the Tories changing their mind.
"Only two years on we’re already seeing the pension freedoms unravelled, based on no evidence that people are deliberately trying to abuse the pension tax system," she said.
4 – Overseas schemes
Financial advisers to those sitting on larger pensions have structured retirement incomes by sending cash overseas through so-called Qualifying Recognised Overseas Pension Scheme, or QROPS.
Freedoms in the past have opened up the possibility for retiress to take advantage of better rates or inducements.
David Hartles of HW Fisher said: “While there are some limited exemptions, as of midnight people could be subject to a significant 25 per cent charge on transferring their UK pension pot to an overseas equivalent.
“This has the ability to affect up to a quarter of a billion pounds of pension savings leaving the UK."
Les Cameron of Prudential said:
The government has been gradually reducing the attractiveness of QROPS for a number of years but this new 25 per cent charge, which applies to some transfers from midnight tomorrow, has come out of the blue.
Some transfers will still be able to go ahead but others will need to be stopped. Many will no doubt pause transfers until the detail of today’s announcement can be fully considered.
"The last thing anyone wants is to incur an unplanned 25 per cent tax charge or possibly more if their intended QROPS decides to deregister themselves. This is high-value business and time needs to be taken to consider the full impact of today’s announcement.”