Comment and Blogs
Automatic enrolment (AE) has, by and large, been a success story. Opt outs have been fewer than predicted and the 10 millionth employee has been auto-enrolled, according to figures recently released by The Pensions Regulator (TPR). It’s also been good to see TPR getting their teeth into a few unscrupulous employers that have flouted the rules to show they mean business.
Read more: Lisa Webster: Beware the side effects auto-enrolment
It seems a long time since we had an annual allowance (AA) of £255,000. These days most pension savers are restricted to £40,000, but the money purchase annual allowance (MPAA) and the horribly complex tapered annual allowance (TAA) impose significant further restrictions for many. HMRC’s pension contribution statistics for 2016-17 tax year give us the first indication of the impact of the tapered annual allowance, and it’s not pretty.
Read more: Lisa Webster: Softening the annual allowance blow
It has recently been announced that divorce laws will be changing.
Read more: Lisa Webster: How will divorce changes affect SIPPs?
The basic premise on contributions made to pensions is that once the money has gone in, you can’t get it out again until you reach retirement age (or earlier ill health or death). There are very few circumstances when exceptions can be made, and if a refund is made other than as permitted by HMRC, then it would be classed as an unauthorised payment with charges totalling up to 70% of the amount refunded.
Read more: Lisa Webster: Contribution refunds – what makes a genuine error?
Staveley will be a familiar name to many. The test case for IHT treatment of pensions following transfer in ill health has been in the news many times since Mrs Staveley’s passing all the way back in December 2006.
Read more: Lisa Webster: IHT, ill health and pension transfers
So it was with bated breath that Chancellor Philip Hammond stood to deliver his November Budget speech. Rumours has been swirling for weeks that pensions could be hit with changes to taxation. It was suggested that this would be to pay towards the NHS deficit among other things. It was with great relief that when he sat down and we reviewed the actual Budget papers that this was all just speculation and there was little impact. This can only be a good thing as any meddling impacts the distrust that consumers have for the pensions system and makes it difficult for advisers to plan for the long term with clients. How many times have we heard that PCLS or tax-free cash as it is more commonly known will be scrapped? Every Budget for as long as I can remember.