Gov't must review ways to improve access to financial advice and guidance for all
Keith Richards, managing director of engagement for the Chartered Insurance Institute, has responded to the Budget.
This Budget will be remembered as one where the UK geared up to battle against the economic fallout from the coronavirus outbreak.
While it is understandable that the government’s focus is on the immediate financial needs of people and businesses affected by the coronavirus it is important that the Autumn Budget focuses on more measures to make sure people have enough cash to last a lifetime.
The increase to the national living wage and annual allowance for pension saving won’t stop people sleepwalking into a care funding crisis or running out of cash in retirement.
We hope the government will review ways to improve access to financial advice and guidance for all. I hope the review of insurance premium tax, that was announced in the Budget, will result in this levy being axed as it has increased the cost of cover for consumers.
Since 2015 the insurance premium tax rate has doubled to 12 per cent and led to the increase in premium rates charged by insurers.
The government’s coronavirus measures recognise that many individuals and businesses lack a financial safety net. The government needs to rethink insurance premium tax and make sure individuals as well as businesses can afford to access insurance that will assist them if work is disrupted, travel plans have to be abandoned or loved ones die.
Raising of tapered annual pension allowance
The increase is good news as many working in the NHS were retiring early rather than facing a tax grab on their pension savings.
It is great to see the amount families can save into Junior Isas and Child Trust Funds will be more than doubled in 2020 to 2021, increasing from £4,368 to £9,000. However, the government needs to do more to encourage a long-term savings habit for consumers of all ages.
The government announced it will explore how to improve the guidance available for self-employed people applying for a mortgage. The Personal Finance Society and Society of Mortgage Professions will engage with the government on ways to improve access to mortgage guidance.
Armed forces – tax relief for employers
The Chartered Insurance Institute fully supports any action that could assist those who have defended our nation enter our profession.
This is a rewarding profession where you can make a positive difference to people’s lives and armed forces veterans often possess the life skills which align with financial planning and protecting people against the risks in life that we all face.
Statutory sick pay
The government has tried to protect businesses during the worst period of a coronavirus outbreak. For businesses with fewer than 250 employees the cost of statutory sick pay for up to 14 days will be refunded by the government in full. This will ease the financial burden on businesses caused by the coronavirus outbreak.