Aptia, a leading provider of pension administration, consultancy and actuarial services, welcomes several of the pensions measures announced in the Budget today - including confirmation that pensioners whose income is limited to the full new State Pension won’t pay income tax and reforms to the current two-year rule on pension death benefits.
However, it has urged the Government to ensure that those with small workplace pensions are not left worse off and warned that replacing the Lifetime ISA with a First Time Buyer ISA must not come at the expense of long-term retirement saving.
Malcolm Reynolds, Aptia's UK President, said: 'The Chancellor's confirmation that pensioners whose income is no more than the full new State Pension will not pay income tax had been widely anticipated. With Aptia research showing that 37% of retirees are concerned the rising cost of living could leave them without enough income throughout retirement, this measure will provide reassurance to many older people. It also reinforces the Chancellor's 'steady as she goes' approach to pension tax policy, opting against significant reforms while the industry awaits the findings of the Pensions Commission.
'However, we are still awaiting details on how the new arrangements will apply to pensioners with small workplace pension savings. Care will be needed to ensure that those with a modest private pension income are not inadvertently left worse off than those who rely solely on the State Pension.
'The move to replace the Lifetime ISA with a simpler First Time Buyer ISA is likely to be welcomed by first-time buyers. However, there is a risk that this could encourage some savers to prioritise house deposits over long-term retirement saving - especially at a time when many people are already not saving enough for retirement. It will be important to ensure that short-term housing goals don't come at the expense of long-term financial security.'
Phil Wadsworth, Aptia's Chief Actuary, said: 'The Government's decision to remove the rule so that beneficiaries will no longer be taxable solely because tax free pension and lump sum death benefits are paid more than two years after the member’s death is a welcome and compassionate reform. It should help address the unfair outcomes that take place under the current two-year rule, where bereaved families may face unexpected tax charges due to administrative delays. The issue was recently highlighted by Cabinet Office Minister Sally Jameson, and these changes should deliver a fairer outcome and greater peace of mind for those affected.'
NOTES TO EDITORS
- Founded to shape the future of pensions, health, and insurance solutions, Aptia is a leading UK pensions consultant and administrator, and employee benefits administrator in the US, and is dedicated to simplifying complexity for businesses and individuals. It brings together cutting-edge technology and deep industry expertise to help organisations navigate an evolving landscape with clarity and confidence.
- Aptia's UK business is the largest third-party private sector pensions administration provider, serving more than 1,600 clients and over three million members. Its clients include trustees, master trusts and insurers, for whom it provides administration and consulting services across both DB and DC pension schemes.
- Aptia has made significant investment in current and emerging technologies, including artificial intelligence, automation and data-driven insights, ensuring it remains at the forefront of digital transformation and innovation within the pensions industry.
- Aptia has a presence in the UK, US, India. Aptia’s strength lies in the combination of smart technology and expert teams, ensuring that managing pensions, health, and insurance is more effective. By focusing on innovation, accessibility, and client success, Aptia helps businesses take care of their people, so they can focus on what they do best.
For more information contact:
Corinne Gladstone, Aptia Head of Corporate Communications & Public Relations.
Email: media.enquiries@aptia-group.com
Sam Emery/ Emma Murphy/ Robbie Lawther/Bruno Aldridge, Quill PR
Email: Aptia@quillpr.com
