In 2014-15 the Budget decisions cost the Exchequer £540m. The 2015-16 numbers are similar – a cost of £640m.

When set against the total tax receipts of over £600bn, the changes look tiny. Arguably, though, this is one of the most important Budgets in recent years. There are landmark changes for the 13m people with defined contribution pensions and also for the 24m ISA savers.

From April 2015, no one in a defined contribution scheme will need to take an annuity. There will be no restrictions on income drawdown – and the tax rate on withdrawals over the 25% tax free sum will be cut from a penal 55% to the individual’s marginal tax rate.

It’s a response to the significant reduction in annuity rates over the last 15 years and a perception that pension providers have not always offered market-leading rates. The immediate slump in the share price of major annuity providers told its own story. The key to implementing this reform will be to ensure that prospective pensioners get independent advice – as annuities will still be the best choice for many.

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