Reaction: Autumn Statement 2023

By Jose Vilchez, Chartered Financial Planner

For many, the most significant announcements in the Autumn Statement were those aimed at encouraging business investment and the reduction in National Insurance rates.

The Chancellor followed up recent statements about offering support to working people with the National Insurance cut instead of offering a reduction to Income Tax rates, which may well follow in the spring as part of an expected pre-election giveaway.

There were few headline-grabbing, financial planning-related announcements, but there are some important ones to consider, particularly those relating to pensions. Notable absences were the much-rumoured reforms to Inheritance Tax and pension death benefits.

The government proposes to give workers the right to nominate a pension scheme instead of being obliged to receive employer contributions through an auto-enrolment workplace pension, effectively allowing savers to build a pension ‘pot for life. This will be seen as positive news, but the administrative burden placed on employers and pension providers will be significant, and it remains to be seen whether the implementation of this will have further impact on the already delayed implementation of the ‘Pensions Dashboard’ reforms.

“The other major announcements on pensions were the confirmation that the lifetime allowance will be formally scrapped from April next year, as previously announced by the Chancellor.”

The other major announcements on pensions were the confirmation that the lifetime allowance will be formally scrapped from April next year, as previously announced by the Chancellor. This will make the reversal that Labour pledged following the original announcement considerably more difficult to achieve. Also, proposals put forward over the summer on taxing death benefits before 75 were not implemented, a welcome relief to pension savers.

ISAs will undergo a series of minor reforms, allowing for multiple subscriptions, partial transfers and an expansion of the investments allowed within ISAs. However, contribution limits remain unchanged, and few will benefit from the reforms brought forward.

For a full guide to Autumn Statement 2023, please download the Sedulo Group Autumn Statement 2023 guide.