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LV= response to the 2015 Budget

18 March 2015 | Press release

LV=’s Managing Director of Retirement Solutions, John Perks, on the Budget.

LV= on allowing retirees to cash in their pensions

"LV= is supportive of the proposal, although it will not be an easy thing to do and we need to be mindful of the possible dangers for customers. Cashing in and spending an already poor value annuity will only worsen an existing problem. Likewise cashing in a good value annuity could also cause customer detriment. However, as part of the pension freedoms, it makes sense that all retirees should have the opportunity to achieve a better income outcome. We believe we can do more to understand the potential risks and benefits here. We have offered to work with the Government to help test the market, prior to determining the best longer term solution and we welcome the fact that they will be consulting to ensure that savers are adequately protected."

LV= on cutting the lifetime allowance to £1m

"The freedoms that those approaching retirement will have from April will help to increase engagement with the pension industry and improve customer outcomes. This change is expected to impact just 4% of pension savers, many of whom will be in defined benefits schemes. For those that are likely to be impacted, it is important that they seek financial advice to ensure they get the best outcome. Regardless of whether these changes directly affect savers, it’s critical that they understand they are saving for a potentially long retirement so start as early as possible and regularly review their plans."

LV= on increased changes to the income tax charged on savings

"These change serve to make savings accounts more attractive and encourage more people to save which can only be a good thing. However, these products don’t offer the same tax relief benefits as pensions. For those looking for a long term saving solution, pensions remain the most tax efficient vehicle available."

Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237. County Gates, Bournemouth, BH1 2NF, UK