Autumn Statement


The Autumn Statement on Wednesday was mainly uneventful (some might say ‘boring’ !) but as ever there will be areas that affect your financial planning. Here are the key points:


  • Reduction in money purchase annual allowance (MPAA) from £10,000 to £4,000 which will further reduce the amount that people can contribute to money purchase pensions, once they have started to take their taxable pension benefits.

The Money Purchase Annual Allowance will be reduced to £4,000 from April 2017. The government does not consider that earners aged 55 and over should be able to enjoy double pension tax relief, such as relief on recycled pension savings, but does wish to offer scope for those who have needed to access their savings to subsequently rebuild them. The government will consult on the detail.

  • Changes to salary sacrifice (although pensions/pensions advice will be exempt).

Following consultation, the tax and employer NI advantages of salary sacrifice schemes will be removed from April 2017, except for arrangements relating to pensions (including advice), childcare, Cycle to Work and ultralow emission cars. This will mean that employees swapping salary for benefits will pay the same tax as the vast majority of individuals who buy them out of their post-tax income. Arrangements in place before April 2017 will be protected until April 2018, and arrangements for cars, accommodation and school fees will be protected until April 2021.

  • There will be consultations on how to tackle pension scams, including how to ban cold calling in relation to pensions.

The government will shortly publish a consultation on options to tackle pension scams, including banning cold calling in relation to pensions, giving firms greater powers to block suspicious transfers and making it harder for scammers to abuse ‘small self-administered schemes’.


  •  New NS&I savings bond will be announced at the Budget

To provide support to savers, NS&I will offer a new market leading 3-year savings bond. The indicative rate is 2.2% but this may be adjusted to reflect market conditions when the product is launched. The bond will be open to those aged 16 and over, subject to a minimum investment limit of £100 and a maximum investment limit of £3,000. The product will be available for 12 months from spring 2017.

  • ISA limits to increase from £15,240 to £20,000 from April 2017 – same as Budget announcement.

As previously announced, the Government will continue to support saving by increasing the ISA limit from £15,240 to £20,000 in April 2017.

  • Starting rate for savings.

The band of savings income that is subject to the 0% starting rate will remain at its current level of £5,000 for 2017-18.


  • Consultation on ending compensation culture for whip lash claims.

Whiplash reform – The Ministry of Justice is consulting on proposals which will reduce the unacceptably high number of whiplash claims and allow insurers to cut premiums. The Government expects insurers to pass on savings which average around £40 for drivers in England and Wales, worth a total of £1 billion.

  • Insurance Premium Tax (IPT) increasing from 10% to 12% from June 2017.

The standard rate of IPT will rise to 12% from 1 June 2017. IPT is a tax on insurers and so any impact on premiums depends on insurers’ commercial decisions. This follows increases in Nov 2015 and October 2016 which will see the tax double in less than 2 years.

  • Changes to tax charges relating to life insurance policy part-surrenders/assignments.

As announced at Budget 2016 and following consultation, the government will legislate in Finance Bill 2017 regarding the disproportionate tax charges that arise in certain circumstances from life insurance policy part-surrenders and part-assignments. This will allow applications to be made to HMRC to have the charge recalculated on a just and reasonable basis which will lead to fairer outcomes for policyholders. The changes will take effect from 6 April 2017.

Personal Taxation 

  •  Personal allowance increase

Increase from £11,000 in 2016-17 to £11,500 in 2017-18. The government will meet its commitment to raise the income tax personal allowance to £12,500, by the end of this Parliament (2020). Once the personal allowance reaches £12,500, it will then rise in line with CPI.

  • Higher rate threshold increase

Increase from £43,000 in 2016-17 to £45,000 in 2017-18. The higher rate threshold to increase to £50,000, by the end of this Parliament.

  • National Insurance thresholds

The National Insurance secondary (employer) threshold and the National Insurance primary (employee) threshold will be aligned from April 2017, meaning that both employees and employers will start paying National Insurance on weekly earnings above £157. This will simplify the payment of National Insurance.

  • Abolishing Class 2 National Insurance contributions (NICs)

The Government will abolish Class 2 NICs from April 2018 simplifying National Insurance for the self-employed.


If you would like to review your financial planning in light of the proposed changes, please contact us >>

Written by Colin Caulfield | Director

Colin is a Chartered Financial Planner & Pension Adviser Of the Year Read more >>

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