NFU Mutual has welcomed the spring budget’s pension changes as it said it will help farmers plan for succession.
Chancellor of the Exchequer Jeremy Hunt unveiled his spring budget to the House of Commons yesterday (Wednesday, March 15), which abolished the lifetime pension allowance.
On behalf of NFU Mutual, the rural insurance branch of the National Farmers’ Union, chartered financial planner at NFU Mutual, Sean McCann said:
“We welcome the Chancellor’s decision to abolish the limit to how much you can accumulate in your pension over your lifetime, as it will help farming families plan for succession.
“Pensions provide an independent source of income in later life separate from the farm, which makes it easier for farmers to gradually step away and hand over more of the day to day management to the next generation.
“Pensions are also normally free from inheritance tax, and many farmers use them as a tax efficient way to build up funds that can be left to non-farming children.
“Farmers will also benefit from the increase in the amount they can save in a pension each year tax free.”
NFU Mutual also welcomed Hunt’s decision to freeze fuel duty at its reduced rate for another year, with McCann saying that rural communities would greatly benefit from it.
“Farmers and rural communities rely more heavily on fuel than their urban counterparts, whether that is using red diesel for agricultural work, or white diesel and petrol for transporting produce around the countryside,” he said.
McCann also praised the allocation of £200 million in budget funding for the repairing of damaged roads and potholes, which are “seriously affecting those driving on rural roads”.
The rural insurance branch welcomed Hunt’s extension to the energy price guarantee, saying that households in rural areas had a higher fuel poverty rate (15.9%) last year than those in towns and cities and rural households are, on average, less energy efficient.
In terms of energy and energy reliance, Hunt reiterated the UK government’s national ambition to reduce energy use by 15% and said that the long-term solution to achieve this is “not subsidy but security”. Hunt said this means investing in domestic sources of energy.
He announced £20 billion in support for the early development of CCUS (carbon capture, utilisation and storage) which will pave the way for CCUS all over the UK by 2050, he said.
Hunt said the UK is in need of “another critical source of cheap and reliable energy, and that is nuclear”.
He said that, subject to consultation, nuclear power will now be classified as environmentally sustainable.
“Increasing nuclear capacity is vital in meeting our net zero targets,” he said.
However, NFU Mutual criticised Hunt’s decision to leave income tax and child benefit tax thresholds frozen until 2028.
McCann said the decision was disappointing because “with inflation still raging, these stealth taxes will leave many people with less money in their pockets in real terms”.