As you will no doubt be aware, we have recently had the Budget date announced as 11 March. This is somewhat later than anticipated, not least because the Conservatives pledged a post-Brexit Budget in February as part of their election campaign.
So one broken promise already, and one that’s causing headaches for those north of the border as Scottish ministers want to see the UK plans before drawing up their own. This is especially problematic as the deadline for Scottish councils to set their budgets is also 11 March.
But what are we expecting in terms of pensions?
The Conservatives promised in their manifesto that the solution to the NHS pension crisis will be announced on Budget day. It is likely this will be a tailored solution for the NHS, but we can still live in hope that measures may reach wider than this as the tapered annual allowance horror show is far from restricted to the medical profession.
What other key pension issues should the new Government be looking at? The net pay issue is a big one which is widely acknowledged but isn’t going away. Of course, with a majority Government in place, a wider review of pension tax relief could be back on the table, which could sweep away the net pay issue entirely. Any such measures are not likely to be in this Budget, but a consultation could be announced for this issue to be looked at later on this year.
Aside from the Budget, it was good to see the Pension Schemes Bill make a swift return to Parliament, and within it measures relating to the pensions dashboards. Originally due out in 2019, whether we actually get to see the launch this year remains to be seen. Even if we do get a rollout of the dashboards this year, it will be of a limited nature as some schemes will not be required to provide the necessary information for up to four years. There is a real danger people may be turned off as a result of using half-baked dashboards with sparse information. Once there is more comprehensive coverage, the dashboards could be a great way to improve engagement – let’s just hope the piecemeal approach to launch doesn’t dampen this.
Investment pathways will be big news in 2020 with their launch date of 1 August. Advisers will have to consider the pathway investments as part of any personal recommendation relating to drawdown. Also due out this quarter is the FCA’s paper detailing its intention to extend pathway requirements for non-workplace pensions – such as SIPPs – to those in the accumulation stage. Watch this space. The new illustration requirements coming into play in April is another product of ROR – changes include different trigger points, a single page summary and no more nominal terms illustrations only for full drawdown clients.
2020 is set to be another busy year in the pension world – with plenty more to come from the FCA relating to IGCs, DB transfers, RDR and the FAMR review, IPMS, ESG and SMR, amongst other acronyms!