Saga comments on latest Budget announcementWednesday 18 March 2015
Commenting on savings proposals in the Budget Saga director Paul Green said:
Saga comments on latest Budget announcement
“The simplification of savings taxation with the new personal savings allowance is great news for Britain’s over 50s, many of whom rely on their hard-earned savings to boost their monthly income to pay for life’s necessities.”
Commenting on changes to annuities and pensions Saga director Paul Green said:
“It is great that the Chancellor plans to build on trusting people with their pension savings by allowing people who already have an annuity in place to obtain a lump sum. However, this is not a decision to be taken lightly, it will be important for pensioners to think long and hard and take the right advice before they take any action to empty their annuity pot. We need a system to ensure people make a decision which is right for them in this complex area.
As always the devil will be in the detail, we need to be sure that the end customer gets a fair price. The FCA has said that this is an area which will need complex advice - this advice will come at a cost, so where does this leave people with smaller pots who potentially are going to be the most likely to want to sell their annuity.
Reducing the pension pot lifetime allowance seems contradictory at time when we are encouraging people to save for their retirement. If people want to continue to retire in their 60s and live on average 30-40 years in retirement then a pot of £1m pays them out just £27,000 a year. This change adds another level of complication and uncertainty for people planning for retirement, there has been a great deal of change over the last two budgets, what we need now is some consistency to allow people to plan.”
Commenting on proposed changes to deed of variation Emma Myers, Head of Wills, Probate and Lifetime Planning for Saga Legal Services said:
"A deed of variation changes a Will after death to allow beneficiaries to alter the distribution of the estate. It has a range of uses, including providing for someone who was left out of a Will, as well as for tax planning purposes."
"A deed of variation isn't just a tool for the wealthy, and people from all walks of life are affected by IHT – particularly those who live in areas where property prices have risen greatly in recent years. Research from Saga showed that more than two-thirds of the over 50s believe home ownership should be excluded from IHT. Ultimately, if the deed of variation is scrapped, many people will end up paying more IHT."
"It is important for people who may be affected to review their Will now, and to have conversations with their beneficiaries and think about whether your children's tax position would be adversely affected by you gifting them money, and if the answer is yes, consider gifting directly to your grandchildren. It makes sense to keep a close eye on how this story develops over the coming months."
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