The autumn statement is due on Wednesday 22 November.
We’ve already heard some suggestions as to what might be announced, like potentially increasing the ISA allowance.
The right changes could help transform people’s finances, and there are five we’d like to see Jeremy Hunt prioritise.
This article isn’t personal advice. If you’re not sure what’s right for your circumstances, ask for financial advice. ISA, pension and tax rules can change, and benefits depend on your circumstances.
1. The right ISA reforms
A rise in the overall ISA allowance is overdue, especially for investors battered by cuts in dividend tax and capital gains tax allowances.
It last increased in 2017, so would need to hit around £25,500 just to keep pace with inflation.
We also want it to be possible for people to be able to pay into as many ISAs of the same type as they like each tax year. But also to make it easier to open, subscribe to, and transfer ISAs.
Other reforms that have been suggested are less welcome.
The fact that it would naturally boost UK investment means there’s no need for a new UK-specific ISA allowance.
Meanwhile, merging the Cash ISA and Stocks and Shares ISA looks straightforward, but could end up meaning more complexity or less choice.
2. Lifetime ISA changes
We know self-employed people aren’t saving as much for retirement as employed people – and a big part of that is they’re reluctant to tie money up.
The Lifetime ISA (LISA) could be part of the solution.
We want to see the LISA penalty cut from 25% to 20%. It currently not only claws back the government bonus, but also applies a 6.25% penalty on your own investments.
This cut would mean people would only lose the bonus, if they needed to access their money in an emergency.
We also want to see the age that anyone can open a LISA and pay into one rise to 55.
We know self-employed workers tend to be older on average, and they need to be supported by LISAs too. Our savings and resilience tool shows these changes could help 1.2 million households with a self-employed basic-rate taxpayer.
Lifetime ISA vs Pension – which is best if you're self-employed?
3. Reviewing the triple lock
High inflation and red-hot wage data look set to deliver another bumper State Pension rise next year. However, there’s a suggestion that the government could tinker with the lock again to bring the rise down.
This wouldn’t be the first time it’s manipulated the rules. It begs the question of whether the triple lock is still a sustainable way to boost the State Pension long term.
People need certainty as to how and when they will receive their pension and the time has come for a review into the State Pension and the triple lock’s role.
State Pension set for April boost – how much could you get?
4. Wider pension reform
The Auto-Enrolment Extension Bill will open workplace pensions up to more people and help them save more. But we want employers to be encouraged to contribute more and match extra employee contributions.
Multiple pension pots, a lack of support with retirement income decisions and complex regulatory requirements also all get in the way of pension saving.
We’d like to see the development of lifetime pensions. That way people could put all their employer contributions into their pension pot of choice, to make it easier to keep on top of and make better informed decisions about.
5. Revisiting the advice/guidance boundary
We know that work is ongoing to enable financial companies to offer more help and support to clients, without crossing the boundary from offering general guidance to financial advice.
There have been some sensible proposals, and we’d like to see that accelerate to a concrete conclusion, to help people make more informed decisions, and tackle their biggest financial challenges.
