Third of consumers likely to be left wanting from Osborne’s Autumn Statement18 November 2015 Back to results
- A third (29%) of people would like Government to simplify the way tax incentives are applied to pensions
- But Treasury delaying its decision till next year, to fully consider consultation responses
- Nearly one fifth (17%) want clarity on how much state pension they will receive
- One in eight (13%) want to see an increase in ISA limits
New research* from Aegon UK reveals what consumers want the Government to focus on in the Chancellor’s upcoming Autumn Statement, set to be announced November 25th.
Topping the list of saving and pension priorities is a demand for simplification regarding the way tax incentives are applied to pensions. The most common response, with nearly a third (29%) of the 4000 consumers surveyed said they would like to see it simplified, and 59% said they’d save more if they received a 30% government incentive on contributions as opposed to the current system which sees basic rate tax payers receive 20% and higher rate payers receive 40%. However these respondents are set for disappointment, with the Treasury recently stating its intention to delay any decision on whether or not to change the way pension tax incentives are applied until at least next year's Budget. This puts a dampener on the wishes of those hoping for a change in the system in 2015 but will allow the government to fully consider the implications of these potentially significant changes.
Additionally, nearly a fifth (17%) of UK consumers want clarity on how much state pension they will personally receive at retirement. This comes as the new single-tier state pension is due to be introduced in April 2016 and over time future retirees will receive the same amount. However, there will be a transitional period in which the amount people receive varies and it’s been estimated that just one in three people will receive the full single-tier state pension when it is introduced next year.
One in eight (13%) want to see an increase in ISA limits, while a similar proportion (12%) want to see the introduction of a scheme to ensure small pension pots move automatically to next employer. Meanwhile, one in 20 (6%), would like to see further legislation to prevent pension fraud.
Kate Smith, Regulatory Strategy Manager at Aegon said: “Recent Budgets and Autumn Statements have been filled with announcements on pensions and savings and the previous government pursued a radical reform agenda. The Treasury has hinted that we’re unlikely to see the outcome of their consultation on possible changes to the way tax incentives are applied to pension contributions until next year’s March Budget. The Chancellor may have a surprise up his sleeve but we’d encourage the government to think through the implications of any changes fully before they come to any conclusion and how they will communicate this to the public. While there appears to be real consumer support for a flat government pension contribution incentive, we were concerned that the other idea on the table of ISA style tax treatment of pension, could create two completely incompatible regimes for every pension saver.”