With no big policies trailed, today's Spring Statement could well be an affair to forget, writes Hannah Godfrey, although some experts fear pensions legislation changes are something no Chancellor can wholly resist ...
Today's budgetary update from Chancellor of the Exchequer Philip Hammond will be the first spring statement after he announced plans to switch the Budget to the autumn in his 2016 Autumn Statement.
Last month, a spokesperson for the Treasury confirmed there would be no red box, no official document, no spending increase and no tax changes. They said Hammond would likely have chosen not to have a Spring Statement at all, were it not for a legal requirement for the Office for Budget Responsibility to publish two sets of forecasts a year.
AJ Bell senior analyst Tom Selby said most people were expecting a relatively uneventful set-up, adding: "The Treasury itself has confirmed there won't be 'immediate' tax changes or spending announcements, so there should at least be a bit of stability on that front for advisers and clients.
"The statement will, however, provide an insight into the overall health of the economy - including growth and inflation expectations, and national debt levels - via the Office for Budget Responsibility's latest independent forecasts."
Nevertheless, Selby continued, no big economic set-piece would be complete without "some mention of the future of pension tax relief".
"The fact the government has only committed to no ‘immediate' tax changes leaves the door open for consultations on future changes, and we know there are some within the Treasury who would like to see retirement savings incentives hacked back further," he explained.
IFS Wealth & Pensions director Ricky Chan also suspected further "tinkering" with the pension system to increase tax revenue could be on the cards.
"The lowest hanging fruits would be to reduce the annual allowance and/or the thresholds of when the tapered annual allowance applies," he said. "I'd be amazed if the Chancellor resisted the temptation to do any tinkering on pensions at all."
Dentons Pensions director of technical services Martin Tilley was sceptical of any big changes but, if anything were to be happen, suggested it would be "a reduction in the annual allowance from £40,000 to £30,000, which while painful for some, will be unnoticed by the vast majority".
Devil in the detail
Nucleus Financial product technical manager Rachel Vahey agreed it was likely to be a "low-key event", although she did expect various documents that could "shed some light on the state of play for UK pensions".
"The Treasury may take this opportunity to publish new consultations, which could inform its thinking for any new policy announcements in the autumn," she continued.
"The Department for Work & Pensions may also publish its white paper on defined benefit [DB] pension scheme funding. So although the spring statement is being trailed as a quiet affair, it will still be worthwhile taking a look through the papers issued on the day."
Former pensions minister turned Royal London director of policy Steve Webb said all the signs pointed to a "seriously dull" statement. Like Vahey, however, he suggested other publications could be launched on the day, such as the white paper on DB pensions.
"We are expecting some important publications over the coming weeks, notably the outcome of the Financial Conduct Authority's [FCA] review of DB to defined contribution transfer advice," he added. "Although I think it's unlikely the FCA would time its publication to coincide with the spring statement."
All-day event on 24 April
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