As the Chancellor of the Exchequer, Rt Hon George Osborne MP announced the 2012 Budget today, I thought I’d better write a blog post with the potted highlights, although obviously for more detail you can watch his long speech, check out what’s published on the Treasury’s website (and is the main source for what is below) or have a read through the extensive media coverage.
I’ll start with pensions.
(a) as average lifespan increases the State Pension Age will go up and
(b) the State Pension will be reformed into a single tier pension for those not currently in receipt of a State Pension but not until the next Parliament (at least 2015).
The latter means such changes don’t affect those currently in receipt of a pension, or those receiving one before the changes come into effect.
Age Related Allowances change affecting those of pensionable age
These allowances affect income tax calculations for pensioners. This will be £10,500 and £10,600 for 2012-2013, with changes in future years from 2013 onwards.
A Pension Infrastructure Platform will be set up to allow pension funds to invest in UK infrastructure.
The Royal Mail Pension Plan is being transferred to the public sector, assuming the government gets approval.
There will be reform of public sector pensions and the age at which you can retire will be increased to bring it in line with increases in State Retirement Age. This and other reforms will have to be agreed with the public sector unions.
The deficit in the Royal Mail pension scheme will be addressed if the government gets State Aid approval. The government will (if they get approval) sell off the non-gilt assets of the pension scheme and take on board the liabilities.