Loopholes in the new Pension Rules

23rd June 2014

Loopholes in the new Pension Rules

Plenty of publicity recently about loopholes in the new pension rules which were announced to great enthusiasm by the Chancellor in his Budget in March.

Apparently everybody in their late 50s is going to be able to sacrifice most of their salary,  get it paid into their pension scheme and then draw 25% of it tax free with the rest suffering no NICs. Big savings made all round at the expense of the Treasury to the extent of up to £20bn a year………..I don’t think so somehow!

We can expect much more to come on this one, and there is always the risk that the rules could be tampered with so that features of pensions that we have become used to (higher rate tax relief, tax-free lump sums) may have to go – not exactly what we were anticipating back in March.

However there is a “loophole” that is already available to a smaller extent, and salaried workers over 60 years old may find it worthwhile to consult their pension advisers about this.

 

Written by Peter Hedgethorne, Director

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