By TIM STALKARTT 30/11/2011
As we anticipated the Chancellor has left pensions alone. With so much change happening within the last year further change would have been both surprising and unacceptable. We encourage clients to take advantage of the generous tax relief available on contributions.
State pension age increases
The State pension age is to increase to age 67 with effect from April 2026, a move that will affect those born between 5 April 1960 and 5 April 1969 (those born after this date were already due to receive state pensions at age 67).
The change reflects the harsh reality that increased and increasing longevity is too expensive for the UK. If you want to retire before State Pension Age the message has to be: take control and increase personal saving now.
No encouragement for savers
The savers of Britain got nothing from the Chancellor today. With base rates likely to stay close to zero for the foreseeable future and inflation continuing to erode the real value of money we were hoping for some assistance for those living off their savings, or indeed saving for their future. Disappointing.
So despite the gloomy message in the Chancellor's speech why am I upbeat? Well, whilst tax remains high there are excellent opportunities for tax relief, not least marginal rate relief on pensions.
Markets at current levels appear to offer good value for long term investors, and with ISA and pension allowances, let alone EIS and VCTs most savers in Britain should never have to pay income tax or capital gains tax on their investments - and that can't be bad!