Budget update: more pieces in the pensions jigsaw
By Jennifer Bell
Three months on from the surprise Budget announcement, I thought it would be helpful to do a brief round-up of where we are.
The headline announcement was of course that from April 2015 individuals with defined-contribution (DC) pension savings will no longer be required to purchase an annuity or enter income drawdown. They will be allowed to take all or any of their benefits as a cash lump sum (subject to the payment of income tax). It had been suggested that schemes would be required to allow this, effectively turning DC schemes into instant-access savings accounts and creating all sorts of administrative and legal challenges. It appears that the government may have stepped back from this position. The briefing notes accompanying the Queen’s Speech on 4 June state that the proposed Pensions Tax Bill will ‘allow individuals aged 55 or over with DC pension savings to withdraw these savings as they wish, subject to their marginal rate of income tax and scheme rules’…
Click on the link below to read the rest of the Nabarro briefing.
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