The Top 3 Highlights of the Autumn Statement

Below I have put together some of the highlights from last week's Autumn Statement announced by the new chancellor to the exchequer, Philip Hammond. Any of my clients reading this who would like a more comprehensive break down - feel free to call me on the usual number and I will be happy to assist.

The first point I would like to highlight is the changes to the personal tax-free allowance. In short, Hammond has raised the PTA from £11,000 to £11,500 in the up coming financial year. This announcement comes on the back of a promise from Hammond's predecessor, George Osborne, to raise the PTA not only in the short term, but also medium term with a proposed further increase to £12,500 by 2020.

Secondly, I would like to draw attention to the removal of the income for life previously imposed on recognised over-seas pensions or ROPS mentioned in Hammond's statement. Here we saw the 'income for life' scrapped (a compulsory 70% of transferred funds set aside to provide an income for the duration of the policy holders life) and replaced with the same flexibility's that are afforded to UK pension holders under the 'pension reforms' introduced last April. The news basically out-lines that ROPS holders can have full discretion over their cash without having to set aside any predefined amount to provide an income.

And lastly, I believe it to be prudent to touch on the changes relating to the state pension. We have recently seen announcements that the state pension will increase by 2.5% as of April 2017. Steps in the right direction however, is this enough? As of April, any pensioner drawing on the new flat-rate pension will see an increase from £159.55 to £159.65 (That's and additional 0.40p per month or £1.20 per year...), whilst the old state pension will rise from £119.30 to £122.30 per week (£12 per month or £144 per year).

It is said that pensions will rise by whichever is the highest figure out of inflation, earnings/wage growth and 2.5%. This method has been coined 'the triple lock rule'. The commitment to boost pensions is said to continue up to 2020 however, is believed to be scrapped after that date with no real indication of what will happen there after.