“While we welcome the additional flexibility available to savers, we are concerned the Government is perhaps going too far, too fast and also missing another opportunity to make things simpler,” says Andy Bell, chief executive of AJ Bell. “We worry people will pull their money out before thinking properly about what they are going to do with it, are uncomfortable with people possibly using their pensions as a means of avoiding inheritance tax, where we prefer the idea of a single flat rate, and wonder whether the new rules would survive any change of Government.”
IFA's who attended the AJ Bell Investival appear to share these concerns. When asked to vote via an app specially created for the event
• 64% did not believe the new rules would last more than a year after the May General Election, were the existing Coalition to fall from office
• 60% said they felt the new pension flexibility rules go too far
• 69% voted that the Government should scrap the Lifetime Allowance for Money Purchase Schemes
Notes for Editors
- AJ Bell's second annual investment conference, the Investival, took place on Thursday 20 November at London's Millbank Tower. Full details and videos of the event can be found at www.ajbellinvestival.co.uk.
- Since March's Budget, the Government has outlined a series of pension reforms which are to come into force from 6 April 2015. The new measures include changes to the inheritance tax treatment of pensions and how much cash can be withdrawn and when from pension schemes.
- The new option of an Uncrystallised Funds Pension Lump Sum (UFPLS) will allow savers to make a single withdrawal from their pension. One quarter will be tax-free, with the remainder subject to tax at the saver’s marginal rate.
- The Government's Taxation of Pensions Bill means no inheritance tax (IHT) will be applied to the pension of anyone who dies under the age of 75. For anyone who passes away after 75, the beneficiaries will pax IHT at their marginal rate of 20%, 40% or 45%, rather than the 55% which currently applies.