This is the time of year when we all look forward to what we can expect and the pensions savings arena is no exception; with so much uncertainty, it might help to look at potential events with varying degrees of probability.
What is definitely happening
There will be a DWP review into the effectiveness of auto-enrolment. With nearly 7m employees automatically enrolled so far the policy is clearly a success; however, the DWP needs to check that these are the right people and if any groups are potentially losing out.
While the results of the review will not be published until the end of 2017 we can expect interested parties to be expressing their views on the earnings and trigger thresholds, age limits and how to tackle the self-employed and multiple job-holders who are not eligible employees.
During 2017 the restriction on transferring in and out of National Employment Savings Trust will be removed and we may see movement between schemes as the larger employers reach their re-enrolment dates as well as individuals looking to move or consolidate their plans.
In March, a prototype pensions dashboard will become available. This is a Treasury promise and undoubtedly something will be delivered. What it will not be is a functional system with live policyholder data on it but it will show the intended design and, more importantly, evidence of progress towards the end result.
The government has also confirmed in that the Lifetime Isa would be introduced in April so this would seem to be definite, although there continue to be new announcements and calls for it to be delayed or abolished. My bet is it will happen but will only attract savers looking to use the money towards purchasing their first home.
What is likely to happen
We are likely to see the introduction of the Advice Allowance following the Treasury’s consultation into how it should work. This will allow payments of up to £500 to be deducted from a pension fund to pay for advice on an individual’s whole range of pensions, not just the one facilitating the payment, which is good because it is unlikely to be available from (legacy) products which do not have an adviser charging facility built in.
Along with the prototype dashboard there are likely to be more technology innovations reaching the market. I have deliberately not called this robo-advice as I believe that many of these tools will be designed to support advice processes rather than replace them.
That said, the introduction of the Advice Allowance and the availability of new technology will together make it probable that lower cost advice and guidance services will start to appear, particularly to assist with “simpler” consumer issues.
What might happen
“Will the government change the tax treatment of pensions?” has been the sixty-four million dollar question for the last two years (all right, much longer than that but it has been a lot more real since the consultation in 2015).
