>>>In his new monthly column for SIPPs Professional, Barnett Waddingham SIPP expert James Jones-Tinsley looks at the difficult pensions road ahead for the Chancellor.
The 7 November saw the first State Opening of Parliament by a King in over 70 years. Hot on the heels of the Chancellor’s ‘Mansion House’ speeches was an expectation among pension professionals that the King’s Speech would include a Pensions Bill.
King Charles announced plans for Bills on vaping and London pedicabs - but made no mention of a Pensions Bill.
And what of the Draft Finance Bill 2023-24, which contains the incomplete clauses enabling the abolition of the Lifetime Allowance (LTA) from 6th April 2024?
At the time of writing, the Finance Bill Sub-Committee is holding oral evidence sessions in the Palace of Westminster.
A quick glance at the calendar reveals there is now less than five months to go until the start of the next tax year. Unless the Bill begins its passage through Parliament very soon, the likelihood of it attaining Royal Assent and becoming an Act before next April, grows ever fainter.
The following Monday after the King's Speech saw Prime Minister Rishi Sunak carry out a Cabinet reshuffle, with the dismissal of Suella Braverman as Home Secretary arguably eclipsed by the (wholly unexpected) return of the former Prime Minister, David Cameron, now Lord Cameron, as Foreign Secretary.
Prior to Steve Webb and Guy Opperman, the role of Pensions Minister was often perceived as a ‘revolving door’, and sadly we appear to be returning to those days again.
Laura Trott, who had held the position for a year – and oversaw positive developments within pensions during that time - was 'promoted’ to Chief Secretary to the Treasury in the reshuffle, with the MP, Paul Maynard, taking up the baton of Pensions Minister. Given that a general election might now only be months away, one wonders how long he will hold that position?
On Wednesday 15 November, the Consumer Prices Index (CPI) figure for October was released and showed a larger-than-expected fall to 4.6% from September’s CPI figure of 6.7% (thereby achieving one of Mr Sunak’s five 2023 pledges to “halve inflation”).
With the State Pension in mind, will the ‘chasm’ that now exists between the prevailing CPI rate and September’s Average Earnings figure of 8.5% impact this year’s Pensions Triple Lock calculation?
If the normal rules continue to apply, those in receipt of a full New State Pension can look forward to an annual increase from next April of £901.02 to £11,501.22 a year.
Those who reached State Pension Age before 6 April 2016 would see a maximum annual increase of £690.40 to £8,812.80 a year.
I’m sure the Chancellor’s first thought about these increases would be, “how much will that cost us?”, and it feels like we are in similar territory to two years ago, where the government changed the locks from a triple to a double.
Will the Chancellor be brave enough to subvert the increase again, during an election year; particularly given the propensity of elderly voters to vote Conservative?
All may be revealed in his Autumn Statement, which takes place tomorrow, 22 November. The Statement’s focus should be on stimulating UK economic growth, although the weekend media was full of tax-cutting speculation, ranging from Income Tax to National Insurance and potentially Inheritance Tax too.
Business-related taxes are more likely to be targeted by the Chancellor, while reducing stamp duty on UK shares could boost returns and encourage an increase in foreign investment into the UK.
It is often said that a week is a long time in politics. Depending on what is said in the Autumn Statement, a day could be a long time too!
James Jones-Tinsley is a technical specialist at Barnett Waddingham on SSAS and SIPPs practice areas. He also presents to clients, advisers and other professionals on pension matters, liaising with the media on changes to pension legislation. James D Jones-Tinsley FPMI APFS, This email address is being protected from spambots. You need JavaScript enabled to view it.