WASPI demand meeting on ‘ongoing issue’ affects bitting ‘vulnerable’ after Budget 2020
Pension changes are on the minds of many British people as life gets more costly and retirement lasts a lot longer than planned. Many were hoping for drastic changes from today’s budget but some may be disappointed by the lack of action taken.
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Rich Sunak revealed plans to raise the amount needed before the tapering allowance system kicks in.
The current annual allowance is capped at £40,000 but there is a secondary arrangement in place for higher earners.
In 2016, a tapered annual allowance was introduced which targeted high earners.
Currently, if anyone earns more than £110,000 a year they will have their pensions affected on a tapering scale.
This system has been criticised in recent years for being unfairly harsh, particularly by doctors with many working less to offset the costs.
This has clearly been a concern for the government as today’s budget raised the point at which tapering occurs.
From April, the minimum will rise by £90,000 to £200,000, meaning a lot of higher earners will no longer be affected.
The NHS and its workers should breathe a sigh of relief as Andrew Coles, the CEO of Isio explained: “As predicted the Chancellor used changes in the pensions tax taper to resolve the problems for NHS doctors.
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“The increase of £90,000 in the salary thresholds is very significant and should be effective at dealing with the majority of the NHS issues. Anyone with total earnings below £240,000 will have the full Annual Allowance for pensions savings of £40,000 from next tax year.”
However, these changes will not only affect the NHS as Andrew warns:
“These changes are not restricted to the NHS and the side effect is that senior executives in the private sector benefit from a surprise tax break following on from years of erosion of pensions tax relief.
“We welcome the change as an effective sticking plaster for the immediate NHS challenges. But it can only be a matter of time before government has to bite the bullet and look at more significant reforms in order to make the whole system simpler and fairer.”
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Many may find it frustrating that these changes will only benefit high earners who may not need these solutions as much as other groups.
One group, in particular, has been campaigning for pension reform for a group with less financial resources, the WASPI group.
WASPI’s plight of fair changes made to state pension ages was completely absent from the budget, which will likely be disappointing for many.
This could feel particularly sour for those who are told there is no money or resources to help them. The budget revealed billions of funding will be given to other causes.
A spokesperson from WASPI commented: “The Chancellor’s Budget once again leaves the crisis faced by 3.8 million 1950s-born women unresolved.
“Whilst the Government is capable of finding billions of pounds of funding and increase in day-to-day spending, it has been unwilling to even meet with WASPI to discuss what fair transitional arrangements for WASPI women would entail.
“This Budget demonstrates that if the government showed good will, it would be possible to resolve this ongoing issue which affects an increasingly vulnerable group of women.
“We urge the Government to meet with us as a matter of urgency to discuss how we can work together to deliver the best outcome for WASPI women.”
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