47881_Budget_2015_Web_Accessible

Extending freedom and choice at retirement1.229 This government has already introduced major reforms to allow people enteringretirement much more flexibility over how they use their defined contribution pension pot,instead of being required to purchase an annuity. The government now wants to allow peoplewho have already bought an annuity to also enjoy flexibility in how they access the value of theirannuity, without interfering with binding contractual requirements.1.230 From April 2016, the government will therefore change the tax rules to allowpeople who are already receiving income from an annuity to sell that income to athird party, subject to agreement from their annuity provider. The proceeds of the salecould then be taken directly or drawn down over a number of years, and would be taxed at theirmarginal rate, in the same way as those taking their pension after April 2015.1.231 The government believes that for most people, continuing to hold their annuity willbe the right decision. However, for others, this reform will allow them the flexibility to use thevalue of their annuity as they see fit. The government is therefore publishing a consultation onhow best to remove the barriers to the creation of a secondary market in annuities, invitingviews on how best to ensure that consumers are in a position to make an informed decision.The government will work with the Financial Conduct Authority (FCA) to consult on how bestto support people’s choices through consumer protection, and protect those who are mostvulnerable. 1021.232 It is important that the UK’s pensions tax system remains fair, affordable and sustainablefor the future. In 2013-14, Income Tax relief for pension savings cost the government around£34.3 billion, up from £30.8 billion in 2009-10, with around two-thirds of this relief going tohigher or additional rate taxpayers. 103 To protect the public finances from this growing cost, thegovernment will therefore reduce the lifetime allowance for pension contributionsthat benefit from tax relief from £1.25 million to £1 million. This will be effective from 6April 2016. The lifetime allowance will be indexed to increase annually by CPI from 6April 2018. Over 96% of individuals currently approaching retirement have a pension pot worthless than £1 million, so this change will affect only the wealthiest pension savers. 104Mental health1.233 The government is committed to parity of esteem between physical and mental health.The NHS Mandate includes a commitment to closing the health gap between people withmental health problems and the population as a whole and from April 2015 there will benew access and waiting times standards introduced for key mental health services. AutumnStatement 2014 committed £150 million over five years to caring for young people with eatingdisorders and funding to expand pilots testing new ways to support those with mental healthproblems to return to work. To go further, Budget 2015 announces a £1.25 billionpackage of additional investment.1.234 Many children and young people experience problems with their mental health,and the government wants to ensure that they get the services that they need. This is whyBudget 2015 will be providing over £1 billion over the next 5 years to start newaccess standards which will see over 110,000 more children cared for over the nextParliament. Alongside this, the government will be providing £118 million by 2018-19 to complete the roll-out of the Children and Young People’s Increasing Access toPsychological Therapies (CYP IAPT) programme, ensuring that there are talking therapistsin every part of the country providing the best quality treatment for children.102Creating a secondary annuity market, HM Treasury and Department for Work and Pensions, March 2015.103HMRC Statistics Table PEN6 – Registered pension schemes: cost of tax relief.104HMRC analysis of Office for National Statistics Wealth and Assets Survey, 2010-12 data.Budget 201559