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ABI responds to Autumn Statement 2014

Chancellor George Osborne's Autumn Statement today included announcements relating to tax on pensions and flood defences.

Abolition of 55% death tax and abolition of tax on annuity payments

Otto Thoresen, Director General, Association of British Insurers, said:

"We had asked the Government to abolish the 55% pension tax when someone dies, and the tax on annuity payments made after a partner has died and so we welcome today's announcement. With the new pension freedoms coming in in April it is very important to engage people with saving and the decisions they will need to make at retirement. Today's tax changes will give people more options. To ensure pensions tax policy is not skewed against income, the tax treatment of pension payments to a beneficiary after a customer’s death should be the same, whether paid through an annuity or drawdown as income or as a lump sum.

"We now hope for more clarity about how the changes in next April will actually work in practice as the industry is working flat out to get ready in time."Otto Thoresen

Expanding the tax relief for businesses who invest in flood defences

Otto Thoresen, said:

"Adequate sustained long term Government investment in flood defences needs to keep pace with the rising flood risk - especially as the Government's own climate change advisers have identified a £500 million shortfall between current spending and what is needed to ensure that we are prepared for the future.

"Anything that can incentivise further funding for flood defences from a wider range of sources, including businesses, is welcome, although we await further detail on how it would work."

Last updated 01/07/2016