Budget 2014: more on the guidance guarantee, transfers and tax

By Jennifer Bell

The government has issued its response to the consultation on the Budget proposals to introduce pension flexibility for defined-contribution (DC) pension savings from April 2015. Individuals aged 55 or over with DC pension savings will be able to access their benefits as they wish, subject to the payment of income tax.

The detail announced this week includes the following: overriding legislation will enable schemes to make flexible payments if they wish; transfers will continue to be allowed from defined-benefit (DB) schemes to DC schemes subject to the individual taking independent financial advice; all DC scheme members approaching retirement will be offered free guidance on using their pensions savings, to be delivered by independent bodies designated by HM Treasury, monitored by the Financial Conduct Authority (FCA) and paid for by a levy on regulated financial services firms; anti-abuse measures will be put in place to restrict tax relief on new pension savings for those choosing to withdraw more than their tax-free lump sum; and normal minimum pension age will rise from 55 to 57 in 2028 and thereafter track at 10 years below state retirement age.

In this briefing, we consider in more detail the key aspects of the proposed new regime…

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