Our future, your future: Investec Wealth & Investment director on pensions

GEORGE Osborne’s Budget saw a possible change of tack from the Government on pensions and personal finances.

Investec Wealth & Investment are holding an event ‘Our future, your future’ on 20 April in Sheffield at St Pauls Hotel, discussing the challenges and opportunities investors will face in the future

To attend, click here .

Alongside John Wyn-Evans who will be talking about the potential impact a Brexit would have on investors, financial planning director at Investec Wealth & Investment Darren Findlay will be discussing the importance of planning ahead for the changes that have come and potential future changes in pensions.

He said: “There are still potential changes to come following the Budget, as we take stock of what we know already about pensions and what planning opportunities that provides.

“We’ve got the lifetime allowance reducing to £1m as of 6 April, and the reduction of annual allowance via tapering coming in. Both of those will have some sort of knock on planning effect for certain clients.”

Following the Government’s recent pensions consultation, there is still speculation about what they may put in place in the future, possibly testing the waters with Lifetime ISAs.

Mr Findlay said: “Commentators suggested there was going to be a major change in the way that people got tax relief on their contributions that basically would have been a big disadvantage to higher rate taxpayers, potentially an advantage to basic rate taxpayers.Investec logo

“There was lots of speculation on how that would work. There were suggestions that well-known features of pensions might change, including the 25% tax free cash lump sum – whether that would be abolished.”

“With what’s happened so far, the Lifetime ISA looks very similar to George Osborne’s original proposals to replace pensions. That is seen by many as a first shot across the bows as to what we might see in the future.

“At the moment it’s limited, it will only be available for people up to the age of 40, when it is introduced in April 2017. It is more restrictive in terms of what you can contribute.

“The wider implication is that a lot of industry commentators see that as ideally what the current Government would like to introduce across the board.

Mr Findlay said: “The Government perhaps views it as a bit of an experiment to see how this model goes and may expand it out in the future if it’s successful.

There are multiple options for pensions now, with auto enrolment in place at the same time as well as several ISA options. Now more than ever people need guidance on their financial future.

He said: “There are key messages that come out of it. The pension freedoms that we’ve got already are generally good and make pensions much more flexible in a number of ways. The possibility of further changes remains and this provides an incentive for people to make use of higher rate tax relief whilst still available.”

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