No-one expected that. Budget? we thought. ‘Meh,’ we thought.
We were wrong.
This is the most impactful budget in terms of personal finance for a long time; certainly since the A-Day days, and maybe since I joined the industry in the mid 90s. Industry response has been feverish and has had us thinking of Anchorman and Brick – ‘I DON’T KNOW WHAT WE’RE YELLING ABOUT! LOUD NOISES!’
ISAs
ISAs used to be called TESSAs and PEPs. One was cash, one was stocks and shares, and never the twain could meet. For some reason which eludes everyone, that division has carried on and has long needed to be swept away. It has been now. Rah. Now everyone has up to £15,000 to save in a way which suits their risk appetite. And £4,000 for the muppets is also welcome.
Pensions
When we combine the key measures ‘slackening of flexible drawdown limits, rise of small pot definitions, rise in triviality limits, rise in capped drawdown and removal of punitive tax charges, it’s clear that the Chancellor is seeking a crown as king of the pension liberators. (In doing so, he might have put the pension liberation business out of business, which is cool). He also put the sword to one of the few remaining cash cows for lifecos, as evidenced by free-falling share prices. Individuals still may need guaranteed income, so annuities aren’t completely dead, but no-one ever needs to feel pressured again.
Advice
Research indicates something like 320,000 people will retire this year. Apparently £20m is being set aside for ‘guaranteed’ F2F advice. Using the power of dividing, we reckon that’s £62.50 a head. Probably not full financial planning, then. Plus, if you read the comments carefully, that £20m is probably going to concept development rather than actually funding advice. So lots more to come on that front.
Summary
We’ve all got a lot of work to do.
Advert
Provider? You probably need some help sorting all this stuff out. Give us a call, yeah? We’ll be down the bingo. Oh, and our apartment smells of rich mahogany.
