The Budget 2017 has revealed the plans Mr. Hammond has for the next year in regards to public spending and state pension. Unfortunately, a major part of the investment will be focused on the support to the government after the Brexit period (an additional budget of £3bn). Therefore, there will be no extra aid to the healthcare as NHS requested. Specifically, NHS England has sought £4bn a year for the wellbeing of the health service. As per Mr. Hammond, the government will not give the NHS £4bn a year, but he likely supports the National Health Service through salary rises for nurses and hospital staff.
Thus, the great news is coming from the pensions. This Budget was designed to attract the old generations of voters as the state pension will increase by 3% in the next April 2018 from £159.55 to about £164.38 giving pensioners an average annual rise of £250. However, people who reached the qualifying pension age before April 2015 will only see their state pension going from £122.30 to £125.97 a week, with an increase of only £191 per year. This measure was totally in line with the triple lock that guarantees the basic state pension to rise by the largest percentage of these following variables: 2.5% annum, the inflation rate or average earnings growth.
Finally, it has been confirmed that the lifetime pension allowance will increase to £1,030,000 from 2018. Though, the pensions annual allowance has seen no changes in the threshold, which stays at £40,000, or to the money purchase annual allowance that remains at £4,000. Finally, even if these reductions are not significant, the news has been welcomed by savers nearing this limit as it will give them more leeway.
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