As Budget day approaches, Jonathan Stapleton says while meddling in pensions may offer an easy way to raise some cash, it must be resisted
Next week will see Philip Hammond deliver his first Autumn Budget against a backdrop of political and economic uncertainty.
He has a somewhat difficult job - needing to find the money for £8bn of extra expenditure the government has committed to while, at the same time, doing little to offend the electorate or, more importantly, his own party.
It is this balancing act that has left many wondering whether the government will, once again, look toward pensions to help plug the gap (see page 10).
Speculation has centred on whether Hammond will tinker with the annual allowance, reducing it from its current level of £40,000; or further reduce the lifetime allowance, either by cutting it explicitly or postponing any inflation-linked increases.
There are also concerns about whether or not the government will look to change the factor for testing defined benefit (DB) pensions against the lifetime allowance.
Currently, DB pensions are tested against the allowance by multiplying the annual pension payout by a factor of 20 - meaning a final salary scheme member can accrue a pension of around £50,000 a year before being caught by the cap.
Given the maximum income you can get from an equivalent DC scheme is less than £30,000, some people feel there should be some adjustment to the 20:1 calculation - revising it to 25:1 or even 30:1 - a move that would reduce the DB maximum to £33,333 a year.
Others think there could be some moves to address intergenerational fairness. But while there is little expectation of radical change, some think there could be some changes to Lifetime ISAs, which could be a popular move among the young.
Yet, while pensions tinkering may offer an easy way to raise some cash, such meddling needs to be resisted.
Pensions are, by nature, long-term. Should the government continue to meddle with the rules, it is likely the trust needed for such a system to work will be eroded further.
The European Court of Justice (ECJ) will deliver its judgment next month in a landmark case on whether pension lifeboat funds are paying out the right level of benefits.
The Conservative party will hold reviews of the tapered annual allowance and net-pay schemes if it is elected back into government, it has said.
Schemes must be aware of the proposed rules on reporting corporate events, or they could face a £1m fine, says Anne-Marie Winton.
The Labour party and the Liberal Democrats have published their 2019 election manifestos, with little similarities in proposals for the future of pensions policy.
The government is to pay the tax bills of NHS workers caught out by changes to pension contribution limits who have been turning down additional work for fear of running up large tax bills.