"This will have knock-on implications both at macro-economic and Government policy level but this is potentially a welcome development for pensions industry and savers."
Osborne said that following the Referendum vote, the government had to be "realistic about achieving a surplus by the end of the decade".
Talking to the Greater Manchester Chambers of Commerce, he said: "As the governor [of the Bank of England] has said: the referendum is expected to produce a significant negative economic shock to our economy."
Yesterday, Carney has said that in his view "the economic outlook has deteriorated and some monetary policy easing will likely be required over the summer".
The Governor said that "uncertainty over the pace, breadth and scale of these changes could weigh on our economic prospects for some time" and that the Bank will consider "a host of other measures and policies to promote monetary and financial stability" over the coming weeks.
However the pensions industry has said that scrapping the budget surplus plan "may have positive implications for pensions policy".
Steven Cameron, Pensions Director at Aegon, commented: “We welcome the Chancellor giving the market early clarification on his move away from clearing the budget deficit by 2020. This will have knock-on implications both at macro-economic and Government policy level but this is potentially a welcome development for pensions industry and savers.
“Ahead of the Budget, there had been speculation that the Chancellor would seek to make savings by reducing the generosity of tax relief on pension contributions in order to balance the books.
“Without the confines of a strict target to hit, pensions may be out of the firing line. We’re in uncertain times but any future Chancellor will start their term with flexibility surrounding the budget and we’d hope for a period of pensions status quo. Any confirmation that radical reform of pensions tax relief is not on the cards would offer some welcome certainty to pension savers.”
