Budget wish list
Last year’s Budget announcement dished up a whole smorgasbord of pension flexibility, which provided some much needed food for thought for how people plan for, and draw an income in retirement as well as what they can pass on to their descendants. With such increased flexible access to pension pots, retirement wealth planning has never been more important. If the Chancellor is going to serve up any more surprise tidbits in two weeks’ time, then we very much hope they’re be along these lines as that will help in enabling more people to make the most of the retirement pot from which they’ve got to sustain themselves in what for most will be an extended old age:
• Removal of lifetime allowance – as the annual allowance has been reduced to £40k a year, there is no need for a lifetime allowance anymore
• Protect tax at marginal rate – maintaining the current rate will continue to encourage people to save into pensions
• Increase IHT threshold – The current level is at £325k and according to the Office of Budgetary Responsibilities, currently 1 in 20 families will be caught by IHT, however, come 2018/19 it is predicted to rise to 1 in 10. And with the Stock Market at an all time high the threshold should be increased
• Flexibility around inheriting ISAs – current terms are that the inherited ISA has to be opened with the same operator that the deceased used, but can subsequently be transferred away. These restrictions should be removed and more flexibility given to the client to do as they wish.