News

Freedom & Choice – consultation response

Posted on by tfp in Pensions Post Retirement

The Government has issued its response to the ‘freedom and choice in pensions’ consultation.

The document can be found at the link below;

https://www.gov.uk/government/consultations/freedom-and-choice-in-pensions

Plans to allow individuals access to their defined contribution pension savings as they wish from April 2015 will primarily be delivered through changes to tax legislation which the government intends to enact in a Pensions Tax Bill later in this Parliament.

The tax system will be structured from April 2015;

  • A permissive statutory override will be introduced to allow scheme to follow the tax rules, rather than their own scheme rules, if they so wish.
  • individuals will be allowed to transfer to another DC scheme, up to the point of retirement (rather than up to a year before scheme’s normal benefit age)
  • Minimum pension age to increase to 57 from 2028
  • Allow provider to innovate with new retirement income products by removing many of the restrictions in the tax rules & pensions legislation
  • Changes to the Annual Allowance for members currently in flexible drawdown, withdraw more than their PCLS from new arrangements
  • Confirm its intention of the 55% tax charge on death on drawdown funds at the Autumn statement 2014