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Pension updates from the Autumn Statement

On 22 November 2023, the former Chancellor, Jeremy Hunt, delivered his Autumn Statement. This set out the Government’s key commitments and objectives for the UK economy. This is what it said about pensions.

Triple lock confirmed to continue for the State Pension

The State Pension is increased each year by an amount determined by either the rate of inflation, the annual rise in National Average Earnings (NAE), or 2.5%, whichever is the highest – the triple lock. The former Chancellor confirmed this would continue to apply for the increase to State Pensions and as the rise in NAE was the greater from April 2024 the State Pension will increase by 8.5%. This is the first time in several years that the State Pension has increased by an amount which is greater than inflation.

Currently the full, new flat-rate State Pension (for those who reached State Pension age after April 2016) is £203.85 a week. From April 2024 this will rise to £221.20 a week.

For those who reached State Pension age before April 2016, their State Pension (known as the old basic State Pension) from April 2024 will be £169.50 per week, an increase of £13.30 a week from its current level of £156.20.

Lifetime Allowance (LTA) abolished

First raised in the 2023 Spring Budget, the proposal to abolish the Lifetime Allowance went ahead in April 2024.

The LTA limited the amount an individual could tax efficiently save towards their pension(s) in retirement. This proposal is seen to help resolve issues within the National Health Service (NHS), where it has been reported that the LTA was a contributory factor to senior doctors retiring or leaving the NHS.

From 6 April 2024 the LTA was abolished by the Government, with new limits introduced to restrict the level of cash an individual can take from their pension savings tax free. The Lump Sum Allowance (LSA) is set at £268,275. This is the maximum that can be taken as one or more tax-free cash sums.

Also in the 2023 Spring Budget, the Annual Allowance – the maximum most people can save tax efficiently towards their pension each year – was also raised from £40,000 to £60,000. There remains a lower limit to those who have accessed some or all of the pension savings under the ‘Pensions Freedoms’ rules.

If you think you may be affected by any of these limits, you should speak to an Independent Financial Adviser (IFA) authorised to provide advice about pensions.

‘Pots for life’ proposal

The former Chancellor also announced he would consult on the idea of ‘pots for life’ for defined contribution pension savers. Currently, if you wish your employer to contribute to you pension savings it is likely that you will need to join the arrangement the company has set up. The ‘pots for life’ proposal would give individuals the right to request their employer pays into another arrangement – a system similar to that currently in place in Australia.

This solution could potentially simplify things for the individual, who may otherwise end up with lots of small pots of pension savings relating to different periods of employment. However, this solution is not without its own complexities, most notably the burden it could put on employers, who could have to pay into multiple arrangements each month. The consultation will explore the challenges this proposal may present. You can expect to see more on this in the coming months.

Coping with the cost of living

Energy bills, fuel prices, general increases to the cost of living — many of us may be experiencing increased financial pressures, and this can be stressful. Financial wellbeing is an important part of personal happiness, and we want to help you deal with some of the issues you might be facing.

There are lots of websites that can help with everything from day-to-day savings tips to debt advice. If you are struggling, have a look, and consider speaking to someone who can help.

Help for Households gives details of any Government support you may be able to claim to help with the cost of living.
MoneyHelper is a free, independent service provided by the Government. It offers advice about pensions, benefits, savings and more.
Money Saving Expert gives lots of advice on everything from reducing your bills to finding the best insurance deals.
Age UK offers help for older people, including benefits you can claim to ease the pressure.
Citizens Advice can help you if you are facing problems such as debt.

Cyber security and your pension

Capita are our Scheme Administrators and in March 2023 they were involved in cyber incident where there was unauthorised access to Capita systems.

They quickly confirmed that this incident likely involved the disclosure of personal data of some of our members. We worked very closely with Capita to minimise the impact on the members affected. Please be assured that if you have been impacted or need to take any action, as a result of the incident, you will have been contacted directly.

We take the protection of our members’ information very seriously and have worked with Capita, the Pensions Regulator, and the appropriate law enforcement bodies to investigate this occurrence.

We are sorry for any distress this incident may have caused you. If you would like further information, you can call the helpline on 0800 2294005 or 020 8629 5979 (UK local number to call from overseas).

Some useful tips to regularly check that you are personal data has note fallen into the wrong hands include:

Review your bank statement and look for any unusual payments or those that you do not recognise. Also ensure any payments you were expecting to receive have been credited to your account.

Undertake a credit report check for newly opened accounts or credit searches that you do not recognise.

If you use online services or telephone banking, always use strong passwords and consider regularly changing them. Try not to use the same or similar passwords for more than one service.

Never give out your personal details unless you are sure who you are providing them to. If in doubt stop and consider how best, you can verify they are who they say they are. One way is to look up the company’s contact details yourself and suggest you call them back.

You can also find helpful guidance on the National Cyber Security Centre’s website.

Pension Scams: stay alert!

The last few years have seen an increase in pension scam activity, with savers being pressured into transferring their pensions into arrangements that might seem legitimate and promise a lot, but which result in people losing their money. We want you to be aware of the risks and know what to do if you are suspicious.

Signs of a scam include:

Unsolicited contact. A genuine financial adviser or institution will not call, email or write to you out of the blue.
Unrealistic promises. Be wary of any investment that offers guaranteed high returns – these are unlikely to be true.
Unreasonable pressure. Scammers will often try to force you into a quick decision or rash commitment. Resist any pressure to take advantage of limited time offers or similar.

We recommend you always check who you’re dealing with, even if they appear to be genuine or have been recommended by someone you trust. You can use the Financial Conduct Authority’s ScamSmart website to access the register of firms and individuals who are authorised to give you financial advice about pensions.

The ScamSmart website also gives you instructions for what to do if you think you’ve been targeted. You can also report a scam (or attempted scam) to Action Fraud. Call 0300 123 2040 or use the online reporting tool on the Action Fraud website.

An update on pensions dashboards

For several years now, the Government and the pensions industry has been working on the idea of pensions dashboards – online tools enabling savers to view all their pension benefits, online, in one place. This could make retirement planning much easier for millions, by giving a clear and consistent view of how much their combined benefits are worth and what sort of income they can expect in retirement.

Developing and delivering dashboards is a complex project and it’s taking longer than anticipated. Following March’s general announcement of a reset to the Government’s schedule for the Pensions Dashboards Programme (PDP), then Pensions Minister Laura Trott confirmed Schemes will now have until 31 October 2026 to connect to the digital architecture for pensions dashboards. That is about two and a half years later than previous regulations suggested.

It doesn’t necessarily mean you will have to wait that long until you can use a Pensions Dashboard, but if you access one before that date, it may not necessarily show all your pensions, because not every scheme will have connected to the system.

There are lots of things that you can do to help. Dashboards will work by using your personal data to find your pensions, so it is important that any pension schemes you have benefits in have the correct details on file for you. You can check that we have your details correctly recorded by logging on to our member portal. You can access the portal by visiting our Scheme website and then clicking or tapping on ‘Pension account login'.

In the meantime, if you have lost contact with a previous employer’s pension scheme (or similar) you can use the Government’s Pension Tracing Service to get back in touch. Go to gov.uk/find-pension-contact-details to find out how. You will then be able to make sure that they also have the right information for you so that those benefits show up when you come to use a Pensions Dashboard in the future.

We will keep you posted on further developments as we hear more.