How much tax is too much?

clock

Neil MacGillivray weighs up the tax charges on various retirement vehicles.

There is no doubt that enabling a scheme member to take benefits on or after age 75 provides a greater degree of flexibility in terms of retirement planning. Increasing the choices available as to how pension benefits are taken, particularly at a time when the prospect is that annuity rates will remain low, has to be seen as a positive move. The major downside however is a 55% recovery charge on death of the member on lump sum payments made out of all crystallised funds and un-crystallised funds for members aged 75 or over, is seen by some as excessive. However, is a tax charge of 55% re...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Income

Market turbulance, de-risking for retirement and the crucial role of annuities

Market turbulance, de-risking for retirement and the crucial role of annuities

Annuities are now back to pre-2008 credit crunch levels

William Burrows
clock 17 April 2026 • 5 min read
Why annuities are back on advisers' agendas

Why annuities are back on advisers' agendas

'Another factor bringing annuities back into focus is the evolving tax landscape'

Ahmed Bawa
clock 24 March 2026 • 4 min read
Just guaranteed income for life sales soar amid adviser demand

Just guaranteed income for life sales soar amid adviser demand

Reports IFRS loss before tax of £118m for 2025

Jen Frost
clock 27 February 2026 • 2 min read