Chancellor George Osborne today delivered a number of different announcements to affect the pensions industry as part of his Autumn Statement. Here is an overview of everything you need to know:

Auto-enrolment

The government has announced the next two phases of minimum contribution rate increases will be aligned to the tax years, this means that instead of increases taking place in October, they will now occur in April the following year.

“Over 5.4 million individuals have already been auto-enrolled into a pension, and the government is committed to supporting individuals and businesses through the final stages of its implementation,” the Autumn Statement document read.

“Opt outs from automatic enrolment have been low and as a result, the number of people who are saving for their retirement is at its highest point since 1997.

“To simplify the administration of automatic enrolment for the smallest employers in particular, the next two phases of minimum contribution rate increases will be aligned to the tax years.”

State pension

The state pension has been increased to £119.30 a week, with the new flat rate state pension being set at £155.65 a week.

Osborne announced the state pension will increase by £3.35 a week, bringing the total weekly income to £119.30 from £115.95 in line with earnings – the biggest rise for 15 years. The new state pension set to be introduced in April 2016 is will be set at £155.65 a week.

“As a result of our commitment to those who work hard all their lives I can confirm that next year the basic state pension will rise to £119.30 a week,” Osborne said.

“This is the biggest real terms increase in 15 years, with all of our increases together it means people are £1,125 better off than they when the Conservatives came into office five years ago.”

The state pension currently costs the government around £86.5bn a year, with 1.67 million claiming the guarantee credit, and the overall cost of pension credit is £6.57bn a year.

Tax relief

Although the government did not announce any changes to pensions tax relief, it confirmed its intention to respond to its consultation during the Budget 2016.

“The government received several hundred responses to that consultation, and is considering the options for reform carefully,” it said.

Secondary annuity market

The government has said it will remove the barriers to creating a secondary market for annuities, “allowing individuals to sell their annuity income stream”.

It said it intends to set out further details on this measure, including the framework for the consumer protection package, in its consultation response this December.

LGPS pooling

It has been announced the government will today publish guidance for pooling local government pension fund assets into up to six British Wealth Funds, which will contain at least £25bn of scheme assets each.

“The government is now inviting administering authorities to come forward with their proposals for new pooled structures in line with the guidance to significantly reduce costs while maintaining overall investment performance, with the wider ambition of matching the infrastructure investment levels of the top global pension funds,” it said.

Inheritance tax

In the official Autumn Statement, the government confirmed it will legislate to ensure a charge to inheritance tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.

Pension credit

Osborne today said the government would limit pension credit payments to four weeks for claimants who are outside of Great Britain from April 2016.

Share Story: