'Pension rules should be relaxed to allow multiple drawdown'

Pension rules should be relaxed to allow multiple drawdown arrangements within the same pension scheme to be consolidated into one, AJ Bell has said ahead of Wednesday’s Autumn Statement. The company has laid out its wish list from the Chancellor’s latest review of spending and said this change would make it easier to manage drawdown arrangements.Currently this can only be done once someone reaches age 75 but the restriction is no longer necessary post pension freedoms, it said.Gareth James, head of technical resources, said his company also wants to see a ban on all early encashment penalties that block access to the pension freedoms.The firm also called for a permanent relaxation of rules regarding block transfers to match the temporary relaxation introduced in 2014.{desktop}{/desktop}{mobile}{/mobile}In a statement, AJ Bell said: “The temporary relaxation allowed some savers who otherwise would have found it difficult to move their pensions into schemes offering the new freedoms, to do so.“However, this opportunity was only available to savers who were old enough to take pension benefits in a limited time frame. Permanently relaxing the rules would allow many more savers to access the freedoms.”There should be a delay on the introduction of the tapered annual allowance until the outcome of the Treasury consultation on pension tax relief is known, the company also said.Adrian Walker, retirement planning manager at Old Mutual Wealth, called for the Government to address legislation which makes matters “overly complicated” for consumers.He said: “The sector has continuously asked for simple changes to out-of-date pension legislation and we hope that the Chancellor will address some of these in the Autumn statement.“For example, the so-called ‘buddy transfer’ system could easily be scrapped, making it simpler and quicker to transfer pension assets. Likewise, current legislation prevents multiple drawdown pots being merged into a single pension contract, adding confusion for customers.”Tom McPhail, head of retirement policy at Hargreaves Lansdown, said plans for a secondary annuity market could again feature on Wednesday.He said: “Having announced a delay to the secondary annuity market earlier this year, the Treasury and the FCA have been working hard to develop a framework to allow annuity holders access to the pension freedoms. They are working towards a launch in April 2017; it is possible we will see some output from the Treasury alongside the Autumn Statement.”

'Pension rules should be relaxed to allow multiple drawdown'

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