2023 Budget Comment & Reaction Round Up

Chancelleor Jeremy Hunt has given a Budget statement to Parliament, with the limit on pension contributions being axed, more cash for energy bill subsidies, regional government Barnett formula uplifts, plus 12 new special enterprise zones which may feature reduced business rates and other sweeteners. Could be good for regional broker or MGA offices, time will tell when the details are revealed.

Other things worth noting include more cash for early years nursery schemes to encourage parents to work and a sort of boot camp for the over 50s to force them back to work.

There will be an annual £1 million prize for AI innovation, which is absolute chickenfeed. Anyone clever enough to develop an AI breakthrough would be far better advised to start their own company, register and protect the IP, then get on the VC funding gravy train before an IPO. How does a £100 million payout sound compared to giving away your secret sauce for £1 million?

In some good news, fuel duty is frozen again, plus beer duty is being cut, to help pubs stay in business. Energy costs for pubs and swimming pools are being partially met with grants too. There’s a new £200m fund to deal with some of the worst pot-holes on UK roads as well. Should have all been done by the new JCB machines during the 2020 lockdown when the roads were quiet of course, but hey, government ministers don’t really do common sense.

For insurers doing their ESG compliance it’s worth noting that more cash is going into nuclear and carbon capture, with nuclear now officially classified as a green nergy source, so these projects will make good long term investments for bigger insurance brands.


Hannah Gurga, ABI Director General says: 

“As insurance and savings providers, employers and investors, the insurance and long-term savings sector has a significant role to play in supporting the Chancellor’s vision for growth. We welcome the Spring Budget which will help boost the economy, support a thriving workplace and further the UK’s transition to Net Zero. It is reassuring to hear the predictions that the UK will avoid a recession this year. The ABI has long called for changes to pension tax relief and today’s announcement is a highly welcome move that will make a real difference for both savers and business alike. 

“We also welcome the support for bolstering the UK’s supply of independent, renewable energy and leveraging opportunities for investment in it. We look forward to working with the Government and regulators to discuss how defined contribution pension fund investment can be unlocked to support innovation in the UK.” 

Yvonne Braun, ABI Director of Policy, Long-Term Savings, Health and Protection says: 

“We are delighted that the Government’s package of measures responds to calls from our industry to take bold action to support people in their retirement planning. The increases to the Money Purchase Annual Allowance and Annual Allowance signal the critical importance of pensions, and scrapping the Lifetime Allowance simplifies the pensions tax system. Combined with a boost to Midlife MOTs, these changes will encourage more people to work and save for longer, building financial security. This now urgently needs to be coupled with lowering the age limit for auto-enrolment and paying pension contributions from the first pound people earn, so that more people can benefit from saving more money for their future. 

“We also warmly welcome the improvements to childcare support which will help more women return to work and boost their financial resilience. This matters not only for the gender pay gap, it is also vitally important for reducing the gender pension gap.  

“Insurers already play a significant role in preventing ill-health, supporting a healthy workforce and helping to reduce pressure on the NHS. We welcome the Government’s focus on helping disabled people and those with health conditions to stay in work, and the steps it is taking to encourage employers to use occupational health services. We urge Government to include health and protection insurers in these measures as providers of quality occupational health services.” 

Mervyn Skeet, ABI Interim Director of General Insurance Policy says 

“We’ve consistently warned that rushing the implementation of the OECD tax reforms risks UK insurers being disadvantaged. Introducing rules which could differ from other jurisdictions, and doing so before others, will only increase administrative burden and could have a significant impact on the competitiveness of UK businesses.    

“It is disappointing to see that Pillar Two will be included in the Finance Bill. In order to work properly, the reforms should be thoroughly scrutinised in parliament. The UK Government should be focusing its efforts on ensuring work at the OECD is completed and agreed, and the reforms are workable on a global level. Only if countries implement the same changes at the same time can the reforms achieve their core purpose.”  


RAC head of roads policy Nicholas Lyes said: “We welcome the Government’s decision to keep the 5p fuel duty cut in place for another 12 months. The cut has given drivers some much-needed relief in what has been the most torrid year ever at the pumps, with price records being broken even after duty was cut. Given the importance of driving for consumers and businesses, duty should be kept low to help fight inflation.”

RAC head of roads policy Nicholas Lyes added: “While welcome, another £200m for potholes is welcome, it is unlikely to make a big difference to the overall quality of our dilapidated local roads.”


Kevin Pratt, Forbes Advisor’s commenting on the latest UK budget announcement to extend the 5p cut in fuel duty and freeze it for the next 12 months:

“Motorists will be relieved that the government is freezing fuel duty and maintaining the 5p-per-litre fuel duty cut, which was due to end next month, for another year. But they’ll also be happy to see an official acknowledgement of the shocking state of Britain’s roads, with an addition £200 million of funding to tackle the scourge of potholes.

“This is nowhere near enough – billions are needed to fix the nation’s potholes sufficiently so they don’t simply reappear in a few weeks – but it is better than nothing. In many areas, driving is the equivalent of slaloming down the road trying to stay out of the worst divots, with expensive repair bills lying in wait for those who fall victim. More needs to be done to help beleaguered drivers.”


Commenting on the Health and Disability white paper launched alongside today’s Spring Budget, Katharine Moxham, Spokesperson for Group Risk Development (GRiD) said:

“It’s really encouraging to see government acknowledging the human wastage that long-term sickness absence from the workplace can bring and announcing positive steps to de-risk the journey back into work. It needs to go much further, however, in addressing how people fall out of work in the first place, as well as how to encourage them back.

“We must deal with the question of how people end up being economically inactive in the first place. In many cases, employees wouldn’t leave work if they were better supported by their employer. The support is available for companies to offer: they will find help within their benefits package – via their, private medical, occupational health or other benefits.

For example, as well as meeting the costs of long-term sick pay, a group income protection policy will include access to help from vocational rehabilitation experts, and access to advice and support with both short- and long-term health conditions and making reasonable adjustments under the Equality Act 2010. An insurer might even help with the extra costs of keeping someone in work – such as providing or modifying equipment – on an ex-gratia basis.”


Reacting to the news that the government are bringing prepayment energy charges in line with customers who pay by direct debit, personal finance expert, Tara Flynn from Choosewisely.co.uk said:

“It’s always been unfair for households with prepayment meters, who are often vulnerable or have low incomes, to be charged more than other customers. Therefore, it was morally correct to ensure that prepayment meter customers pay the same as everyone else, and this action should have been taken much earlier”.


Following the confirmation that corporation tax will rise to 25%, founder and CEO of mycommunityfinance.co.uk, Tobias Gruber, said:

“At a time when start-ups have already been severely impacted by the pandemic, energy crisis, and high inflation, it’s not appropriate to increase corporation tax. 

“Today’s confirmation to increase corporation tax is extremely unwelcome news and is likely to be devastating for companies that are already struggling.”


Simon Bath, property expert and CEO of iPlace Global commented;“Today’s budget announcement will provide some welcome relief for families across the UK with support in areas such as childcare, energy costs and fuel duty – these measures will at least give households a bit more breathing room. “The creation of the twelve investment zones as part of the levelling up agenda will undoubtedly have a positive effect on the property market in those areas. Hunt’s plan to reduce regional disparities could not only encourage builders to accelerate development projects, but also help stimulate activity within the housing market to revive waning demand. Over the next few years we could start seeing this have a material effect on Britain’s long-standing supply and demand issue.“One of the key factors missing from today’s budget was the targeted efforts in supporting rental sector, particularly around increasing housing allowances in line with inflation, which despite the Bank of England’s ten consecutive rate rises, is still persisting. Soaring rental costs have been catalysed by the fact that landlords are needing to hike up prices to keep up with inflationary pressures and now what we’re seeing is an increase in the number of renters who are on housing benefits or universal credit who are still being required to cover the shortfalls.“Landlords are beginning to let go of their buy-to-lets as a result of higher maintenance costs, meaning that the rental market is slowly drying up. However, hopefully from what the government has announced, we’ll be able to see more people incentivised to invest in a property as it could somewhat alleviate the current rental and housing stock shortage.”


Faye Church, Chartered Financial Planner at Investec Wealth & Investment offers these insights;


The pension changes announced by the Chancellor today have potentially opened the floodgates for millions of savers to take advantage of the tax efficiencies of pensions to boost their retirement savings. They are two simple changes – abolishing the Lifetime Allowance and raising the Annual Allowance to £60,000 from £40,000 – these will help a wide range of retirement savers.

“This is much celebrated news from the Chancellor as this unexpected boost to, what has been a long-term suffocation of pension savings, will be most welcomed by those that have an appetite to increase their pension pot ahead of retirement.

“There is even a small window of opportunity for those who are due to retire this year to maximise their pension contribution if they are already over the current lifetime allowance, while they still have the earnings to make contributions. There could even be scope to carry forward any unused contributions from the previous three years, a possible gross £160,000 contribution in total. However, we would urge anyone looking to boost pension contributions to seek expert financial advice before going ahead.”


“The Lifetime Allowance – the maximum amount you can hold within a pension during your lifetime – will be abolished, having been in force since 2006. This is a welcome lifeline not only for those that wish to save more for a tax-efficient retirement, but also those that are already find themselves over the Lifetime Allowance.

“Most recent HMRC data shows a record 8,510 people broke the Lifetime Allowance and paid a total of £342 million in charges because of this. For the medical profession, the low Lifetime Allowance has been a driver for some to retire early as they fear being penalised for accruing large pension entitlements.

“Many savers in defined contributions schemes have unwittingly fallen foul of this allowance due to healthy investment performance, through no fault of their own. In 2016 the FTSE100 stood at around 6,000, whereas today we see it around 7,800; an increase of 30%. Over the same period the Lifetime Allowance has been fixed at just over £1 million, making pension pots close to, or at the Lifetime Allowance an easy tax target.

“This creates a lot of opportunity for those wishing to maximise their pension pot, but unable to due to either the restrictions on the amount they are able to contribute or having too much already saved within their pension.


“The Annual Allowance – or limit to annual pension contributions – will increase from £40,000 to £60,000. Where the Annual Allowance has been frozen at £40,000 since 2014, many employees who are lucky enough to be in a final salary pension scheme have found themselves being penalised as the pension benefits they accrue each year have increased with wage inflation, yet the maximum they can accrue has stood still.

“Most recent HMRC data shows a record 42,350 people breached the limit on a total of £950 million in contributions.

“It will benefit thousands of workers, not just doctors who the Government want to entice back into work but also those who can afford to contribute up to £60,000 gross into their pension and also have the income to validate the tax relief.


About alastair walker 10917 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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