Nevertheless, Maike Currie, associate investment director at Fidelity International, said is was a ‘kick in the teeth for ISA savers’: “The increase is typically based on September’s inflation figure and while we have been in negative territory, any increase would have been welcome for the nation’s savers.”
Pensions, for once, were also left relatively untouched. The Chancellor confirmed that the secondary market for annuities would become available: “The government will remove the barriers to creating a secondary market for annuities, allowing individuals to sell their annuity income stream.” Further details will be set out in the Government’s consultation response in December.
The Chancellor also confirmed that he would keep the pensions’ ‘triple lock’. Hugh Nolan, director, JLT Employee Benefits, said: “Keeping the triple lock is great news for pensioners. However, this will be paid for by the current working generations. These people won’t get such good pensions for themselves, especially with the delay in the minimum contribution for auto-enrolment. Therefore, this increases the intergenerational unfairness, with younger people losing out. The reality is that the working people of today will have to save a lot more to guarantee themselves a decent retirement.”
Chris Wagstaff, head of pensions and investment education at Columbia Threadneedle Investments, said many would still be worse off: “Triple locked basic state pension up 2.9% in April to £119.30 pw means 80% of those reaching SRA in 2016 will be worse off with new state pension. There have also been no measures to increase full eligibility to “missold” single tier state pension beyond current 38% of those reaching SRA in 2016; and no softening of transitional arrangements for women born in the 1950s affected by accelerating SRA from 60 to 65 seems very unfair.”
There were also some small changes to the inheritance tax rules around pensions, which have already undergone significant reform. The report said: “The government will legislate to ensure a charge to inheritance tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.”
