George Osborne has binned plans to unleash further radical changes to the pensions systems, according to widespread national media reports at the weekend, though there has been no official Treasury comment either confirming or denying this.
But it is probably going to be a case of putting the ideas on ice rather than scrapping them entirely, some said this morning.
Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: “This does look like a stay of execution rather than a cancellation.”
He said: “Investors, particularly those who pay higher rates of income tax, who want the certainty of benefiting from the pension tax system in its current form, should make the most of their allowances and opportunities while they still can. We may see a further consultation paper in the Budget, or we may simply get confirmation that plans have been put on hold.”
Richard Parkin, head of pensions at Fidelity International, said: “The threat of radical change to pension tax relief appears to have receded for now but the problems identified in the Chancellor’s review and the subsequent national debate remain.
“We expect this is action postponed rather than action abandoned.”
Jon Gwinnett, product technical manager at Nucleus, said: “I don’t think we’ve heard the last of pension reform and I would regard change as shelved, rather than off the agenda. As a country, we need a long term vision of what pension provision should look like, and an end to the confidence damaging effects of using pensions for short term political ends.”
Mr Parkin said: “We should use this time to have a fuller and less hurried debate of how best to support long term pension saving. We already have changes coming into effect for higher earners in April that are causing significant disruption and we urge the Chancellor not to fiddle with the system further.
“If we are to make changes then let us do that in a considered and orderly way rather than continuing the tinkering that adds complexity and undermines public confidence in the pension system.”
Mr McPhail added: “The nature of the briefings suggests that the Treasury would now find it very difficult to make any significant changes to pension taxation without suffering a significant dent to their credibility but there is still plenty of wriggle room for changes in the Budget. Given that the need to raise money hasn’t gone away, pensions must still represent a tempting target.”
The Treasury told Financial Planning Today it does not comment on what it deems ‘Budget speculation’.