Liberty SIPP

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Pension Consultation decision delayed

It has just been announced that the Government has delayed their announcement on the pension tax relief consultation that the industry were expecting by the end of September. Our trade body, AMPS, have informed us that they now believe that there will be a statement made in the week commencing 11th October.

This is not totally a surprise due to the nature of the proposed changes and the varying responses received by people throughout the industry.

Probably the most contentious area is the change to the annual allowance. Since simplification in 2006 there have been set annual allowances that you can contribute into your pension – which is up to 100% of annual earnings currently limited at £255,000.

The proposal is that this will be reduced to an amount between £30,000 and £45,000. It is also proposed that the lifetime allowance will be reduced from it current level of £1.8 million but with protection for those who have pension savings in excess of the reduced allowance.

Most interest has been focused on the removal of the requirement to by an annuity and the scrapping of ASP. As a result of this there are proposal to change the current levels of death benefit payments from 35% to 55%. This area has provoked a great deal of discussion and the announcement from the Government is most keenly anticipated.

Once we have clarity from the coalition we will let you know.

Oct 1, 2010