Autumn Statement 2016

The past few years have seen quite drastic changes to the way we save for retirement, so this statement was a less eventful affair.

Money purchase annual allowance (MPAA)
From April 2017, the MPAA will be reduced from £10,000 to £4,000. This means that anyone who has flexibly accessed their pension income will be limited to saving £4,000 a year (£3,200 before tax relief) into a personal pension, without triggering a tax charge. This has been put into place to stop individuals recycling tax relief.

Triple lock
The government remains committed to maintaining the 'triple lock' until the end of this parliament. Put simply, the triple lock is a calculation used by the government for increasing the Basic State Pension. Currently it is increased each April by the higher of the growth of average earnings, the consumer price index (CPI), or 2.5%. There have been many who question whether this is sustainable.

Salary sacrifice and the taper annual allowances
Salary sacrifice is the inclusion of benefits in your remuneration package in exchange for giving up part of your monetary salary. People have used this in the past to reduce the amount of tax and national insurance they pay.

There was talk of tax savings on salary sacrifice and benefits in kind being stopped, and this will happen, however there will be exceptions. These will include ultra-low emission cars, childcare, cycle-to-work schemes and thankfully, pensions.

There are still some questions about whether this will be reflected in the ever-more confusing tapered annual allowance for higher earners.

Pension scams and cold calling
Since the introduction of pension flexibility there has been a steep rise in pension scams and cold calling. The government is looking to ban this. The ban, which could be enforced with fines of up to £500,000, will not cover texts and emails so remember to stay vigilant. Read more here.