The Chancellor’s decision to defer any major changes to pension tax relief is a sensible one, with automatic enrolment at its peak and the pension freedoms still bedding in. It allows advisers to focus on helping their clients make the most of the new flexibility, without the distraction of further major change.
The fact that the Government has conducted such an open debate on incentives to save has been useful though. Not least, it has reinforced how important it is to make the most of the current pension tax system.
With retirement savings very much in the front of clients’ minds, now could be a great time to remind them of the benefits of pension saving. But how many truly appreciate the value of the current incentives to save in to a pension?
The combination of tax relief on contributions coupled with the new pension freedoms makes pensions a very attractive place to save for retirement.
Pensions are now far more accessible than ever before, allowing greater opportunity to provide a legacy from any funds which are not spent during retirement. And this should increase their appeal to savers as long standing barriers to pension savings, such as limited access and loss of fund on death, have been removed.