Over 50s magazine, holiday and insurance group Saga has examined the Autumn Statement announcements, its impact on the over 50s and who might be the winners and losers.
1 Pensions
Nici Audhlam-Gardiner from Saga Investment Services commented: “Thankfully the Chancellor took the decision not to tinker too much with pensions, making too many changes puts people off saving into pensions and they are still getting around to fully understanding the last set of reforms. It looks as though 2020 could see the end of the triple lock and maybe more as the Chancellor indicated he would be looking at the cost of an ageing society in the next Parliament.
“The one announcement he did make was the launch of a consultation to reduce the Money Purchase Annual Allowance, on the face of it this seems like a sensible solution to stop people from gaining an unfair tax advantage by recycling their pension. However careful thought will need to be given to ensure people who genuinely needed to withdraw from their pension pot will have a chance to put back an appropriate amount for when they are finally able to retire.
“Saga welcomes the consultation into cracking down on pensions scams. Cold calling is a real concern for older people. Many of these individuals have worked and saved hard all their lives to provide for their futures and it’s absolutely right that the Chancellor puts in place measures to protect people from these unscrupulous scammers who often target the most vulnerable in society.”
2 Pensions “Triple-Lock” Under Threat?
As expected, the Chancellor said that the government did not plan to make any changes to the current triple-lock protection on the state pension, which means payments rise every year by at least 2.5%. However, it remains to be seen whether the triple-lock will be maintained beyond the next general election, due in 2020.
3 New Savings Bond
Nici Audhlam-Gardiner, from Saga Investment Services, commented: “The announcement of a new savings bond paying a market leading rate, is something that people over 50 will appreciate. This recognises the stress that people who have worked hard and paid all their lives have been suffering as a result of ultra low interest rates. However many people in retirement rely on the interest from their savings to boost their monthly income and the interest on a £3,000 bond is not going to make up for the money they have lost over recent years.”
4 Housing and banning letting agent fees
Paul Green, director of communications at Saga, commented: “Banishing upfront fees charged by letting agents will be good news for the third of over 50s who are currently living in rented accommodation. However, it might not be such good news for the Saga generations who have become accidental landlords in recent years.”
“It is good news that the Chancellor is addressing the current housing crisis and is committed to delivering more affordable housing. We are pleased that he is investing money in building a wider range of building types, and we hope that these will include accommodation suitable for older people, enabling more older homeowners to downsize to the accommodation they want while freeing up more family homes.
“Around 3.4 million over 50s have more than one spare room and many would like to rightsize or downsize, but feel the costs associated with doing so outweigh the benefits. We believe one stamp duty free move would remove some of the barriers to moving and help release some properties onto the market and would urge the Chancellor considers this in the future.”
5 Motoring
Paul Green, director of communications at Saga, commented: “We’re pleased to hear that the Chancellor has committed to spend £390m on driverless cars and new generation electric cars. Motoring is really important to our customers as it keeps them active and social and anything that helps people to remain engaged in society for longer is to be welcomed. Around two fifths of over 50s think that driverless cars will enable people to continue to be mobile in later life.”
6 Insurance Premium Tax
Paul Green, director of communications at Saga, commented: “Increasing insurance premium tax for a third consecutive time is incredibly frustrating for people who are trying to do the right thing and protect themselves and their belongings. This may prevent some people from buying the insurance they need.”
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