General pensions rules will apply to Racs

Professional Adviser
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After A-day, the date at which the Government intends to implement its pensions reforms, contributio...

After A-day, the date at which the Government intends to implement its pensions reforms, contributions to retirement annuity contracts (Racs) will have to follow the same rules as for all other pensions. Currently, Racs use a different calculation to determine the eligible tax-free lump sums, based at present on three times' residual annuity. As this calculation depends on annuity rates, which are currently at historic lows, the switch to the same 25% calculation used by personal pension could be seen as more attractive. Alasdair Buchanan, communications director at Scottish Life, said...

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