Autumn Statement 2015 – Saving and Pensions
November 26th, 2015
Automatic enrolment minimum contribution rates
The two scheduled increases in automatic enrolment minimum contribution rates will each be deferred by six months, to align them with the start of the tax year. This will provide a substantial saving in tax relief for the Exchequer.
Pensions tax relief consultation
The government launched a consultation in the Summer Budget 2015 on the system of pensions tax relief. The government is considering the responses and will publish its proposals in the 2016 Budget.
Dependant scheme pensions
There will be some simplification to the test that takes place when a dependant’s scheme pension is payable.
Following the introduction of a single tier pension from 6 April 2016, the pension tax rules on bridging pensions will be aligned with Department for Work and Pensions legislation.
Secondary market for annuities
The barriers to creating a secondary market for annuities will be removed, allowing individuals to sell their annuity income stream. The government will set out further details on this measure, including the framework for the consumer protection package, in its consultation response this December.
Individual savings accounts (ISAs)
- The ISA, Junior ISA and Child Trust Fund annual subscription limits will remain at their current level for 2016/17. The ISA limit will remain at £15,240. The Junior ISA and Child Trust Fund limits will be kept at £4,080.
- The list of qualifying investments for the new Innovative Finance ISA will be extended in autumn 2016 to include debt securities offered via crowdfunding platforms. The government will continue to explore the case for extending the list to include equity crowdfunding.
- The ISA savings of a deceased person will continue to benefit from ISA tax advantages during the administration of their estate. Legislation for this measure will be introduced in 2016, following consultation with ISA providers.
Starting rate of savings tax
The band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2016/17.