Our pension clocks will need altering again soon

By Mattioli Woods

27 Oct 2016

Pensions have seen constant change for as long as most of us can remember. Just as we are about to alter our own domestic clocks at the end of October back to GMT, we encounter the darker nights lasting for longer. There is also about to be yet another period of change for the Pensions market over the coming 6 months.

By Craig Hugo, Taylor Patterson.

Kick starting this process of review will be the first Autumn Statement from the new Chancellor Philip Hammond who will want to impose his own style on the fiscal markets and also look to impose his own stamp of legacy on the pension world which will affect all of us at some point in our lifetime.

The Lifetime ISA (LISA) is due to be launched in April 2017 and the relevant legislation is currently making its way through Parliament. People below the age of 40 will be able to take out a LISA and invest up to £4,000 a year. The Government will add in a bonus of up to £1,000 until age 50.

People will be able to withdraw funds free of charge, including the bonus element, to buy their first home as long as the value is under £450,000. This must be at any time from 12 months after opening the account. Funds can also be withdrawn free of charge from age 60. If funds are taken out at any other time the bonus element is lost and an additional 5% charge is applied on the total value.

For example, if someone had paid in £50,000 (including the bonus) at the end of a ten year period with investment growth it was worth £64,000, the exit penalty would be £16,000. This means the Government gets back the £10,000 bonus it has added, but also charges another £6,000 which equates to almost half of the growth. Anyone taking out the new LISA needs to be aware of the potential benefits and penalties in equal measure.

In April 2017 there will be the introduction of the Pension Advice Allowance. This will allow individuals to withdraw up to £500 tax-free from their pension pot to help pay for advice.

It is good to see that the Chancellor has seen the importance of the needs of people approaching retirement who are now faced with more choices which has also led in general to greater confusion.

With this move to allow people to access their pension on their own terms they will no doubt require even more guidance and assistance to ensure a good outcome for themselves. The ability to access advice whilst also being allowed to cover £500 towards the cost of this advice from their pension savings may be invaluable. The key will be what that advice looks like and how big that market will be.

The secondary annuity market is due to start in April 2017 but before that we still await to hear much of the detail with more guidance due from the Government on the framework that will be required when this is implemented. It is expected that those individuals looking to sell their annuity will need to seek expert financial advice before being allowed to complete this transaction.

There is a great deal of concern about the impact this market will have on the consumers that will be affected with poor value outcomes for many, but with an equal opportunity for those who are the buyers.

State Pensions are also due a further review early in 2017. State Pension Age is currently increasing to 65 for women by 2018, then gradually increasing to 66 for men and women by 2020. This review is likely to suggest bringing forward dates for future State Pension Age increases to 67, 68 and beyond with the end result being a revised timetable of changes through the 2020s and 2030s. We may have wondered if after all the recent pensions related changes and challenges we have dealt with and in the main overcome, that following on would be a period of reflection and consolidation. It looks like change is here to stay and gathering pace with it.

Latest news

1

Roundhouse secures approval for new £15m office and industrial scheme in Preston Momentum

Roundhouse secures approval for new £15m office and industrial scheme in Preston

25 Jul 2025

2

Homebuilder's high-performing sales advisers clinch awards Ben Garland and Julia Lorente

Homebuilder's high-performing sales advisers clinch awards

24 Jul 2025

3

Work is set to start on Multiversity project Multiversity Blackpool

Work is set to start on Multiversity project

24 Jul 2025

4

BAE Systems welcomes MOU between Republic of Turkiye and UK for purchase of Typhoon aircraft Typhoon production Warton

BAE Systems welcomes MOU between Republic of Turkiye and UK for purchase of Typhoon aircraft

23 Jul 2025

5

Assystem to double UK jobs to deliver Sizewell C EDF Assystem

Assystem to double UK jobs to deliver Sizewell C

22 Jul 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

Preston Tech Connection: Buzz Word Bingo. Challenging Todays's Buzzwords In Tech
July PTC banner long updated.png.png
LBV Hub Networking
29 Jul 2025 - 29 Jul 2025

Preston Tech Connection: Buzz Word Bingo. Challenging Todays's Buzzwords In Tech

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Preston Freelancer Meet-Up: July
Longer July Banner.jpg.jpg
LBV Hub Networking
31 Jul 2025 - 31 Jul 2025

Preston Freelancer Meet-Up: July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Advantage: AI – A Workshop for Business Leaders – August 14th
Navy--Event Tile.png.png
LBV Hub Seminars
14 Aug 2025 - 14 Aug 2025

Advantage: AI – A Workshop for Business Leaders – August 14th

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 12:00

The Business Network Central & East Lancashire
LBV Header (24).png.png
LBV Hub Networking
21 Aug 2025 - 21 Aug 2025

The Business Network Central & East Lancashire

Mytton Fold, Langho, BB6 8AB

11:30 - 14:15

Morecambe Bay Walk
Walk.jpg.jpg
LBV Hub Awards
30 Aug 2025 - 30 Aug 2025

Morecambe Bay Walk

Arnside, CARNFORTH, LA5

09:30 - 14:00

Longridge Soap Box Derby
Screenshot 2025-06-10 090035.png.png
LBV Hub Fundraisers
14 Sep 2025 - 14 Sep 2025

Longridge Soap Box Derby

Berry Lane, Longridge, PR3 3WH

10:00 - 16:30

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV 123 Online Graphic
Subscribe now

Weekly news bulletin