Budget: AIFA’s response

Nia Williams

March 25, 2010

Chris Cummings, director general, AIFA said: “Today’s budget only tells half the story for the future of the economy. The real question of how to address the current Government deficit will only be tackled after the election. The next spending review will really set the future direction of travel for the economy.

“The Budget should have done more to help smaller businesses, such as IFA firms.

“We support the consultation on allowing AIM shares to be eligible as a tax-advantaged (ISA) investment for retail savers. IFA firms can list on AIM and so this offers potential new sources of capital for IFA expansion.

“However, the National Insurance increase is disappointing as it acts as a tax on jobs. The Chancellor should have reviewed this decision and withdrawn it.

“We fully support a review of the default retirement age. We need an open and honest debate about our ageing society. The current situation does not recognise the changing nature of retirement, which is now much more of a phased activity. We should recognise and celebrate this change not restrict individual choice.

“We hope this review will also consider the current policy of compulsory crystallisation at age 75. People should not be forced to make a once in a lifetime decision that could result in them being significantly worse off in retirement than if they were allowed a more flexible approach.

“The commitment to increase the ISA limit in line with inflation is a welcome boost for savers and investors.

“But the decision to reduce pension tax relief for higher earners, by hitting employer contributions, will have a negative impact on pensions saving in the UK. This sends the wrong message to those who are saving for retirement.”

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