Hundreds of thousands of savers with “final-salary” pensions, which are considered the Gold status of company
The Chancellor announced on Monday 29 September 2014 that from April 2015 individuals will have the freedom to pass on their unused defined contribution pension to any nominated beneficiary when they die, rather than paying the 55% tax charge which currently applies to pensions passed on at death. From next year, individuals with a pension drawdown arrangement or with uncrystallised pension funds will be able to nominate a beneficiary to pass their pension to if they die.
Thousands of people may be able to double the income produced by their private pensions by exploiting the new savings freedoms to boost the value of their state pension. Only those approaching retirement may be able to use this little-known secret, created by changes to the pension rules announced in the Budget in March. The ploy will be of particular interest to savers with modest funds which they intend to convert into an income. On a typical
Employers are currently prevented from helping people plan their retirement because of concerns they could be sued, Simon Foster, head of corporate life and pensions, UK and international savings at Zurich, said. Mr Foster said employers do not want to play a huge role in helping savers plan for their old age adequately because they fear calls for compensation “even many years after they have offered guidance”. He said the government should give employers “safe harbours” on their liability. Mr Foster said: “This will encourage them to play their part in helping savers reach better decisions.” Earlier today consultant Ros Altmann claimed that fundamental changes in pension advice and saving products were needed as she called for the launch of a ‘national retirement guidance network’ from April 2015. Ms Altmann said a ‘national retirement guidance network’ should be brought in from April 2015 focusing on those about to retire a
Hundreds of thousands of savers could be heading for a tax shock at retirement because they fail to understand the new pension freedom rules being introduced by the Government. Many people with defined contribution pensions are labouring under the illusion that they will be able to access their retirement pots tax-free from next April 2015. People will be given unrestricted access to their pension pots provided they’re above the age of 55, but most retirees still do not realise they will still have to pay marginal income tax on withdrawals. But the basic premise is that people with money purchase pensions will be able to make withdrawals from pots as and when they like once they turn 55. They will still be able to take 25 per cent of their pot as a tax-free lump sum. Previously, withdrawing cash above the 25 per cent lump sum from a pension pot outside of an annuity or income drawdown product would have incurred a 55 per cent tax charge on the amount taken – but this has been scrapped
There has been a surge in pension advice enquiries Post Budget 2014. The diversity of potential products available post-retirement was encouraging people to seek advice. Credencis say:
People being targeted by cold callers who are falsely claiming to offer new, free Government-backed retirement guidance could end up putting their money into risky investments and losing their pension savings, the City regulator has warned. The Financial Conduct Authority (FCA) is alerting consumers to beware of phone calls, emails, text messages and online adverts offering them a “free pension review” and being encouraged to move their pension to “get better returns”. The regulator said it was hearing evidence that some callers were claiming to represent the Government after it announced plans in the recent Budget to offer impartial face-to-face guidance on the range of options people had available for their pension pots. The guidance has not yet been launched and it will coincide with plans from April 2015 to give people aged over 55 the freedom to take their pension pot however they see fit. The FCA said that as the new guidance initiative was still at the development stage, “claim
The year 2014 marks the time when mid-sized and smaller businesses will have to meet their obligation to have a pensions auto-enrolment scheme in place. While businesses with over 250 employees will have made their plans well in advance to hit their deadline of February 1, many of the 40,000 businesses who will stage this year have their deadlines before the summer. Whether your organisation is well on the road to implementation or just grappling with the challenge of auto-enrolment, here are some tips to make the project run. 1 Get Advice early No company will be able to make auto-enrolment happen without some external advice about the process and compliance of your proposed pension scheme. There will be high demand for this advice and the later you leave it, the more you can expect to pay. Start the process of finding an advisor early on and build the costs into the budget. 2 Plan early ahead of your deadline Pensions auto-enrolment is a substantial project for every business. You w