UK - Pensions tax simplification plans are flawed and will leave a litany of overcomplicated rules, a leading consultant warns.
The Inland Revenue’s aim is to reduce eight tax regimes down to one. But PricewaterhouseCoopers says measures outlined in the Finance Bill will leave six regimes in place.
PwC says the Bill will leave taxation rules for registered schemes, employer-financed retirement benefit schemes, overseas recognised schemes, overseas unrecognised schemes, section 615 schemes and corresponding accepted schemes.
Chief actuary of pensions Trevor Llanwarne said simplification will be difficult, particularly for those with pension savings above the £1.5m limit.
“It will meet the government’s aims to provide benefit to 98% of the workforce. However, it will create enormous demand for advice from the remaining 2% of earners.”
Confirmed changes in the Bill – to be implemented from April 2006 – include a measure to allow AVCs and protected rights schemes to draw a 25% tax-free lump sum on retirement.
A suite of liability driven investment (LDI) indices has been launched by STOXX and RiskFirst to aid trustees and consultants select, monitor and challenge managers.
British Airways and the trustees of one of its pension schemes are set to argue over the purpose of a pension scheme, leading to an impactful judgment for DB pensions. James Phillips explores the issue
Bank of England governor Mark Carney has said there is still a lot of data to consider before the Monetary Policy Committee (MPC) can decide when to next hike interest rates.
Savers are not squandering their tax-free lump sums under Freedom and Choice but are taking a more cautious approach to retirement, according to Prudential research.