Pensions Partner David Fairs comments on what today’s Spring Budget means for UK pensions.
Commenting on what today’s Spring Budget means for UK pensions, David Fairs, Pensions Partner, said:
“Given that we are already awaiting Cridland’s review of state retirement age, the Government’s review of auto-enrolment, the Pensions Bill on Master Trust regulation and the outcome from the Pensions Green paper, the fact that today saw no major changes to pensions is welcomed.
“However, whilst we are awaiting the outcome of the auto-enrolment review, it is a shame that on International Women’s Day nothing was done to give women a fairer deal when it comes to auto-enrolment. Those in part time, and low paid, work which are more prevalent forms of employment amongst women, currently get a raw deal. If we simply reduced the auto-enrolment trigger to £5,000 a year and made 100 per cent of salary eligible for contributions, this would go a long way towards closing the gap between women’s and men’s pension provision. It would also mean more people are saving, and crucially, more people are saving a meaningful amount.”
Commenting on changes to qualifying recognised overseas pension schemes (QROPS) transfers, David added:
“There could be some unintended consequences in the proposal to impose a new 25 per cent tax on anyone transferring a pension to a different country to the one they live in. This is designed to discourage people from transferring their benefits to a jurisdiction just to enjoy lower taxes. The charge will not apply where someone genuinely moves and lives in the same country as their pension, but the problem is that this isn’t always possible. So for example, someone emigrating to the US is not able to transfer their UK pension there because of an incompatibility of US and UK rules. An expat in that position might want to transfer their pension to an offshore centre so that they could convert their pension benefit into US dollars but they too will now face a hefty tax.”
Follow us on twitter: @kpmguk #SpringBudget
For further information please contact:
KPMG Press office
T: +44 (0) 207 694 8773
Christina Bridge, KPMG Corporate Communications
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff. The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.