June 2010 Budget - Pensions

Author:Ms Rachel Rawnsley, Catherine McAllister, Jade Murray and Paul Carney
Profession:Addleshaw Goddard LLP

Today's Budget includes the following pensions measures:

The Government will continue with plans to restrict higher rate pensions tax relief and is committed to the principle that any reform in this area should raise no less revenue than existing plans. However, it is critical of current legislation on this issue and will look at alternative proposals involving a significantly reduced annual allowance, perhaps in the range of £30,000 to £45,000. The Government is looking at how plans to increase the State Pension Age to 66 can be accelerated. The Government will consult shortly on how it will quickly phase out the Default Retirement Age (i.e. age at which employees can be forced to retire) from April 2011. The existing rules which create an effective obligation to annuitise from age 75 will end from April 2011. A consultation on the detail will be announced shortly. The Finance Bill will contain transitional measures for those yet to secure an income who will reach age 75 in the meantime. The Government states that it is supportive of auto-enrolment. It also states that it has committed to reviewing private pension reforms and will be announcing details of a review shortly. From April 2011 the basic State Pension will increase by a "triple guarantee" of earnings, prices or 2.5% whichever is highest. The Consumer Prices Index...

To continue reading