It was a blockbuster budget for pensions, the biggest since pension freedoms as Pensions Age reported on the day.
The most striking aspect of the shakeup in pension allowances was the scrapping of the lifetime allowance. It currently stands at £1.07million.
Other reforms included the increase in the annual allowance from £40,000 to £60,000 in any year and with carry forward still applying, something the FT focused on here.
The Money Purchase Annual Allowance increases to £10,000 from the previous £4,000 making this call from various platforms a few weeks’ ago look like one of the most successful budget lobbying pension campaigns in history.
The maximum Pension Commencement Lump Sum will stay at the current level of £268 275 and will be frozen thereafter, the Treasury added.
In terms of details, HMRC has sent out guidance on LTA abolition process, as reported by Professional Pensions referring to Pensions Schemes newsletter 148.
As PP reported, HMRC is telling administrators they should continue to administer lifetime allowance (LTA) checks but confirmed those with protections would now be able to accrue further benefits.
The newsletter also noted that, as a result of the Budget changes to the LTA, the maximum amount which a member can take as a PCLS will be frozen at £268,275 — 25% of the current standard lifetime allowance of £1,073,100.
It added that members with a protected right to a higher PCLS would continue to be able to access this right and benefit from the lifetime allowance abolition.
The adjusted income threshold for the tapered annual allowance will also be increased from £240,000 to £260,000 from this April.
Was there a downside?
Well, the tax free cash change led to lots of online debates.
In the Telegraph, former pensions minister Steve Webb even suggested it was the beginning of the end for tax free cash!
In terms of other reaction, the LTA move was welcomed by doctors as the British Medical Journal reports, though it is important to remember the AA change is also significant for younger doctors working long hours.
But will the changes last? Certainly in the left-leaning press, the move has been presented as one for the one per cent as this Guardian report demonstrates.
Another doctor’s news website, Pulse, reports with concern with Labour’s plans to reverse the changes. Labour suggests it is sledgehammer to crack a nut, so perhaps they will reverse some measures and target them on health workers.
What it means for IFAs is that the change could last less than two years. That is not exactly stable for pensions planning.
For those want to consider the budget overall, Sky has a lot on the economics and fiscal element including that observation that Mr Hunt is still spending rather a lot.
The Times honed on the very heavy tax burden but also the spending squeeze in certain areas.
In non-Budget news, a Sipp and Ssas provider has failed with nearly 500 claims against it.
DAC Pensions, formerly known as Davies & Co SSAS Solutions Ltd trading as DAC Pensions, was declared in default by the Financial Services Compensation Scheme last week.
The BBC asked this week whether we were seeing a set of small fires or a conflagration in banking.
The crisis covered both coasts, with New York-centred Signature Bank also needing rescued.
A lot of attention is being paid to whether a Trump-era reform, that eased restrictions on US mid-sized banks (huge in global terms of course) led to the collapse – this US factchecking site considers the regulatory debate.
Yet this is very interesting – in Slate magazine discussing the various dilemmas facing customers in this case a cat food startup. Note loans from SVB were contingent on the business solely banking with them.
It is also of note that HSBC picked up the UK subsidiary of SVB if not for a song then for a pound, though it has also pumped in £2billon.
A lot of attention had then turned to Swiss bank Credit Suisse. Admittedly the bank has faced problems for many years. It then received a Swiss central bank cash injection but after an initial recovery that had not impressed markets by Friday last week.
There was talk of UBS buying the business or even Blackrock picking up part of the business though the latest news (on Sunday evening confirmed that UBS has bought the business for £2.6bn - an extraordinary amount of price destruction. Then again, that is more than a bust bank.
The UK might warn about such shotgun weddings after Lloyds bought Halifax with much subsequent woe.
Before this latest news, FTAlphaville did a comparison of Credit Suisse and SVB with lots of valuable insights, though it does place a lot more blame on SVB.
Certainly many global bank stocks have suffered in the maelstrom.
Late on Sunday, central banks announced they were pumping billions of liquidity into the financial system as this notice from the ECB details.
Finally, in other news, the FSCS has published a survey of how the cost of living has impacted consumers. Two pension statistics stand out –
26% of respondents say they are taking more risks with their money to gain a better return.
23% of those with a pension have either decreased the percentage they contribute or stopped contributing to their pension entirely over the past few months.
The Chancellor may have to turn his attention to the pensions mass market rather than the top end some time soon.
