It is welcome news for many in the pensions industry as Chancellor Philip Hammond chose to leave pensions alone in his Budget announcement today.
Delivering his first Autumn Budget, the Chancellor left pensions unscathed, although changes could be revealed in the Budget background documents. However, he did reveal that the government is today publishing its action plan to unlock over £20bn of new investment in UK scale-up businesses. He expressed his desire to facilitate pension fund access to long-term investments, and said the UK “stand[s] ready to step in to replace European investment fund lending if necessary”.
"Today we’re publishing our action plan, to unlock over £20bn of new investment in UK scale-up businesses. Including through a new fund in the British Business Bank, seeded with £2.5bn of public money. By facilitating pension fund access to long term investments," he said.
The Chancellor delivered a Budget for the young and future generations, declaring his policies will make a “Britain we can be proud of, a country fit for the future”. Continuing the theme, he pledged his commitment to build more homes to make the “dream of home ownership a reality for all generations” and abolished stamp duty for first-time buyers for properties under £300,000.
As part of the plan to bring more fairness between the generations, there had been rumours the Chancellor would shake-up tax relief, bringing about a cut in tax relief for older people to fund a cut in National Insurance for the young. However, the Chancellor did not choose to focus on pensions tax relief during his speech, but it remains to be seen whether there are any changes published in the Budget background documents.
During his speech Hammond revealed the Office for Budget Responsibility has downgraded the country’s GP growth for this year down to 1.5 per cent, rather than 2 per cent forecasted in the Spring Budget. It has also predicted for GDP to be 1.4 per cent in 2018, 1.3 per cent in 2019 and 2020, 1.5 per cent in 2021 and 1.6 per cent in 2022.
He also said inflation will peak at 3 per cent in this quarter before falling back to the government’s target 2 per cent rate over the next year.
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