2012 Budget – The KISS Principle
Keep It Simple Stupid. Due to my various limitations words often directed towards yours truly. Well as we hold our breath for next week's budget we sincerely hope that the "Coalition Quad" stick to the KISS principle. Further tinkering with pensions legislation runs the risk of seriously damaging the credibility of the pensions industry and more importantly consumer trust in pensions saving.
One area that is getting a lot of media attention is tax relief on pension contributions and following the last couple of weeks of leaks, u-turns and leaks of u-turns we are hopeful that Mr Osborne (I'm not old enough to call him Boy George) will leave higher rate relief alone. We hope that this rumour turns out to be true otherwise the outcome will be a return to the complexity which Mr Osborne inherited.
I'm not sure if you remember the dark days of the anti-forestalling legislation (I have done my best to forget) which as well as being very complex was introduced with absolutely no notice in which to plan on 22nd April 2009. This led to awkward situations for clients contributing to pensions at this time and very difficult conversations for financial planners who had the rug abruptly pulled from beneath them.
We were very positive in the move to scrap such absurd complexity and have adapted our systems accordingly to work within the parameters of the reduced lifetime allowance and carry forward. 2012 being the year in which auto enrolment kicks off in earnest the very last thing consumers need is another reason to lose confidence and trust in pensions and their regulatory structure.
Away from the Budget but on the subject of regulatory change don't forget that all applications for fixed protection must be with HMRC by 5th April 2012. We understand that no exceptions can be made to this deadline and HMRC will not accept applications by email so we would suggest that this is pushed up your to-do pile as soon as possible.