LONDON, 5 December 2012 – Aon Hewitt, the global human resources solutions business of Aon plc (NYSE:AON), has commented on the reductions in both the lifetime and annual allowances announced in today's Autumn Statement.

The annual allowance will reduce from the 2014-15 tax year to £40,000 (from £50,000), which could impact some savers as early as April 2013 (due to the way pension savings are measured for tax purposes). The lifetime allowance will reduce from April 2014 to £1.25 million (from £1.5 million) requiring individuals to decide whether to 'protect' their existing pension savings. This decision is more complex with the possible introduction of 'personalised protection', which offers limited downside protection for their savings.

Tony Baily, partner at Aon Hewitt, said:

"Pension savers - helped by their employers - have spent the last two years considering how to adapt to a reduced annual allowance and whether to elect for 'fixed protection'. Unfortunately, they will need to re-live those last two years all over again. This time the potential number of pension savers affected is significantly bigger and the decisions more complex with yet another form of protection to consider - 'personalised protection'.

"Savings above the annual and lifetime allowance are not tax efficient and so employers will want to consider the alternatives to offer to affected employees. With the reduced annual allowance applying as early as April 2013, time will be limited to consider the options and make any changes."

Tony Baily continued:
"Employers and their employees had thought that these complex decisions were behind them and looked forward to some stability around the pension savings regime, only to be disappointed at yet another raid by another Chancellor on pension savings."

Media Contact: 

Colin Mayes                                                    Adam Leviton
Aon Hewitt                                                       Capital MSL
01372 733689                                                020 7307 5339
colin.mayes@aonhewitt.com                     adam.leviton@capitalmsl.com

 

Notes to Editors

About Aon Hewitt
Aon Hewitt is the global leader in human resource solutions.  The company partners with organisations to solve their most complex benefits, talent and related financial challenges, and improve business performance.  Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.  With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees.  For more information on Aon Hewitt, please visit www.aonhewitt.com.

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About Aon
Aon plc (NYSE: AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.