TISA commentary on Autumn Budget
Following the Chancellor’s Autumn Budget statement today, The Investing and Saving Alliance (TISA), welcomes the Chancellors decision to maintain the tax advantages and thresholds in saving for the long term within a pension or ISA vehicle. We are also particularly pleased to see the triple lock maintained.
The inclusion of pensions within Inheritance Tax (IHT) considerations reflects the changing landscape of retirement savings. Pensions were originally designed to provide a steady income throughout retirement, but for some, their advantageous death benefits have inadvertently allowed them to become a vehicle for receiving tax relief on contributions and mitigating IHT obligations. As always, the finer details will be critical, and we look forward to collaborating with industry stakeholders and HMRC in the months ahead to ensure a balanced approach that preserves pensions’ primary role in retirement security, whilst also considering the important role of protection.
The increase in the National Living Wage is a positive step, with significant implications for pension savings. Higher wages mean that many employees will see an increase in both employee and employer contributions to their workplace pensions, bolstering retirement savings for thousands. Additionally, for part-time and multiple-job workers, this rise may tip them over the £10,000 threshold in a single employment, bringing them within the scope of Auto-Enrolment and expanding pension coverage.
Similarly, raising the work hour limits for carers while retaining Carer’s Allowance eligibility strengthens the financial resilience and wellbeing of some of our most vulnerable in society, providing carers with more income and the opportunity to save for the future.
On improving HMRC’s digital capabilities, we support efforts to extend Auto-Enrolment to cover multiple job holders earning over £10,000 across combined employments and to include self-employed individuals. Enhanced digital infrastructure also has the potential to address the current PAYE system limitations, which frequently result in consumers being overtaxed on pension income, leading to substantial delays in tax refunds. By addressing these inefficiencies, we can ensure a fairer and more efficient system for all taxpayers.
The official 2024 budget files can be accessed here: https://www.gov.uk/government/topical-events/autumn-budget-2024
Find out more about TISA’s work as the consumer-focused financial services membership body on a mission to help improve financial wellbeing for all: https://www.tisa.uk.com/about-tisa/