With the Spring Statement in just one week’s time, one would expect the rumour mill to be working overtime, whether that be changes to pensions tax relief, or further pooling of Local Government Pension Funds.

This year, however, the Chancellor is aiming to tone down the Statement, having moved it from the autumn. According to the BBC, the Treasury has said there will be "no red box, no official document, no spending increases, no tax changes". Given that possible tax changes usually take centre stage in such predictions, the confirmation that there won’t be any, is set to make it a rather quiet statement for the pensions industry.

PA Consulting Group financial services expert Nitesh Palana and pensions expert Mike Teall said the Spring Statement is “unlikely to contain any radical changes to pensions, even though changes are necessary”. Unfortunately, however, for pensions they predict that there will be very little in the Spring Statement that will excite those in the pensions industry, with the Statement predominately focusing on extra money for Brexit and initiative to increase the supply of housing.

Stevens and Bolton LLP partner Gabrielle Holgate predicts that the Chancellor may use the Statement to enact legislative provisions in the Pension Schemes Act 2015 to enable collective defined contribution schemes, which she says could be an “easy win” for the government. After all, Royal Mail has expressed a desire to set up a collective defined contribution scheme and Holgate notes there has been suggestions made by the University and College Union strikers that a collective defined benefit scheme could resolve ongoing strikes.

However, despite the Chancellor saying there will be no tax changes, Barnett Waddingham senior consultant Malcolm Mclean believes they are still a possibility. “Although Hammond has said tax changes will henceforth be reserved for the main Autumn Budget he obviously needs to be careful about disclosing plans for abolishing higher rate tax relief too far in advance given the flood of extra contributions and thus extra tax relief costs that might well generate from higher rate taxpayer pursuing the “buy one whilst stocks last” principle. On that basis, an announcement next week with an effective date from the start of the next tax year in little more than three weeks’ time might suit him better.”

But could the Statement be overshadowed by something much more important for the pensions industry? The defined benefit white paper. Holgate says that the Chancellor may use the Statement to highlight the government’s upcoming white paper on DB pension schemes. But there are reports that it may be released on the same day as the Statement; Royal London director of policy Steve Webb, a former Pensions Minister, is expecting the white paper to coincide with the Statement.

McLean, however, is less hopeful, and would be surprised if it were to be published alongside the Statement. On the other hand, McLean thinks Hammond may choose to pre-announce some of the key elements within it – notably those with financial implications such as the plans for consolidation and better use of DB scheme resources, extra powers (and resources) for The Pensions Regulator etc.

It is spring, however, and Minister for Pensions and Financial Inclusion Guy Opperman promised a spring release, especially as it was originally meant to be launched in the winter. However, when asked, the Department for Work and Pensions said that no date has been confirmed as of yet, so for now, we wait.

Share Story: