IFoA responds to the Autumn Statement

Derek Cribb, Chief Executive of the IFoA, comments on the Autumn Statement made by the Chancellor of the Exchequer today (23 November):

On changes to Annual Allowance on money purchase schemes:

“The money purchase annual allowance will fall from £10,000 to £4,000.  It means that people who have flexibly accessed their pension savings under pension freedoms are limited in how much money they can put into their pension.  While this could reduce the likelihood of people gaming the system, it could in fact hit middle earners who have accessed the pension freedoms, for example by taking a lump sum, but are still in employment.  This reinforces the need for people to access proper financial advice so they do not make decisions that unintentionally leave them worse off in retirement than expected.”

On the clampdown on whiplash claims and the increase in insurance premium tax:

“The IFoA welcomes the further measures announced by the Chancellor to clamp down on unnecessary whiplash claims.  The savings for policyholders will be beneficial, as well as reducing costs for insurers.  However the increase in Insurance Premium Tax (IPT) will reduce the benefits for policy holders and could leave many cutting back on their cover, leaving them underinsured.”

Funding for the NHS:

“It is disappointing that no further funding was announced for social care, as there is still a massive funding gap of £1.9 billion next year in the social care system.  This gap in social care funding is creating an additional burden on the NHS. Tackling the crisis in social care is crucial to securing the sustainability of the NHS.

“It is estimated that 25% of men and 35% of women aged 65 today are likely to need care at some point in their lives.  In the face of an ageing population this demand on services is set to rise. Services are already being rationalised and this is leaving more older and disabled people without access to social care funding."