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Emerging markets - a problem of definition

Technical Article

Publication date:

16 October 2018

Last updated:

06 November 2018

As we near another budget there is always speculation about what will happen. 

For years we had leaks so that we really knew what was to come before the documents were released. That was the pension freedoms announcement, the leak was that nothing would happen and many, myself included believed that this would be the case. I wasn’t even in the office. Now nothing is a given and we wait with bated breath for the documents to be released (pensions aren’t usually exciting enough for the speech).

So what do we think will happen this time around, not a lot to be honest. The Government has stripped out the majority of tax it can from pensions without getting rid of tax relief entirely or scrapping tax free cash. I truly don’t believe either of those are likely so any changes will probably be tweaks to issues we are already dealing with on a regular basis.

Annual allowance

There is scope for a reduction in the annual allowance again, but I would have thought that this may come with the removal of the tapered annual allowance. The tapered annual allowance is complex and I am not sure the Government really thought that it would cause quite the problems it has, take the NHS Pension Scheme for example, the administration cost of now offering voluntary scheme pays will be huge.

Lifetime allowance

We are about to see the second increase in the lifetime allowance since it was slashed back in 2016. It will still be significantly lower than £1.25m so it seems unlikely they would want to cut this again so soon. The Government are already receiving significant tax revenues from previous cuts.

Tax relief

We have heard that the issue with net pay schemes and auto enrolment is being considered, but this doesn’t feel like a budget change, but you never know. Flat rate should get a mention but as I have said many times before the cost to the defined benefit pension schemes and employers is likely to see a change of this magnitude avoided. It has been consulted on once before and clearly it wasn’t deemed right then, not much has changed so I believe we are fairly safe there.

Tax free cash

Every year this is said to under threat, nothing more or less has happened that would impact this so yet again I feel will won’t have to worry.

Death benefits

The pension freedom change that was hailed as the most generous could be under threat, but the impact of this change from 2015 will still be unsubstantiated for many years to come. Any changes to this would be seen as a U-turn because of the short time period since it’s implementation, which doesn’t rule it out but yet again I feel it is unlikely. 


There is little that could be changed that wouldn’t have a lead in period, so panic retiring or panic dying seems unnecessary at this point. We will have to wait and see and keep our fingers crossed they don’t manage to come up with any nasty surprises akin to the tapered annual allowance that is still the bane of many of our lives.

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This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.