Pensions in the Pre-Buget Report
Right, this BeeLine is about all the pension bits that popped up in yesterday’s Pre-Budget Report by your man the Chancellor. I meant to put it on the BeeHive last night, but I’ve had one of those weeks to tell the truth. Manic really. I flew back from speaking mid-week in Zurich at some conference about the implementation of the IORP Directive next year just in time to get down to Canterbury where I was booked to speak to a big group of pension-friendly accountants and, to be honest, by the time I got back last night I was just too frazzled to write up anything. Sorry about that. I missed the football on Wednesday night too if that’s any consolation to you.
Anyway, I’m back on the case now and there were one or two interesting things announced yesterday, one of which I think is a bit of a bombshell really.
The boring bits first:
- The Basic State Pension is going up next year to £82.05 a week for single people and to £131.20 for couples.
- The Guaranteed Credit Threshold (for Pension Credit) is also to increase to £109.45 for single people and to £167.05 for couples.
- That means the maximum Savings Credit that can be paid out during the 2005/6 tax year will be £16.44 a week for single people and £21.51 a week for couples - another good reason for getting divorced.
The Chancellor still stuck to his guns with the Pension Credit and the report didn’t give any indication of alignment with other Ministers who have recently hinted that it may not be long for this world. The report also stated that while there are no plans to increase the State Retirement Age, there’s going to be plenty of encouragement and greater flexibility on offer for people who want to soldier on.
And then there was something that stopped me in my tracks a bit. Referring to the Tax Simplification process we’ve just been through these last years that culminated in the Finance Act 2004 the report says: “The Government is responding to representations made on the Finance Act 2004 legislation, and will introduce a further package of supplementary measures in Finance Bill 2005.”
Yes, you heard it right. We’re going to get ‘a further package of supplementary measures’ in next year’s Finance Act, probably in July 2005. So the final rules for our tax legislation that we thought we already had in July this year are going to be subject to further amendments next year. Ooh-err! That means the final rules weren’t final after all. Worse still, there is no indication anywhere in what was said yesterday about what kind of ‘supplementary measures’ will be included in this ‘further package’. I mean, will it be just a few tweaks to what has already been put in place in the tax legislation, or will whole bits of it be re-written?
Your guess is as good as mine I’m afraid, so I suppose we’ll just have to wait and see. Let’s hope it’s nothing too major though, it was looking difficult enough to give people definitive advice on the new tax regime in time for A-Day as it was. When I read phrases like ‘further package of supplementary measures’ what I actually see written in front of me is something like ‘further uncertainties and less time to advise people properly’. But perhaps I just can’t read properly.
3 December 2004
All information included has been produced by us for our own purposes and the results of it are being made available only incidentally.