Post A-day threat to tax-free cash, warns Bee

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Pension scheme members currently eligible to more than 25% tax-free cash risk losing out if they transfer to another pension arrangement post A-day, warns pensions expert Steve Bee.

The head of pensions strategy for Scottish Life says this is because the tax-free entitlement will belong to the scheme and not to the individual member under the new regime. Those most at risk are in EPPs (executive pension plans) or S.32s (Section 32 buy-outs). Any individual deciding to transfer to another pension arrangement after the new rules come into force could end up losing their enhanced tax-free cash status. "I reckon a lot of people will get caught out by that one," Bee warns. "In effect it means that people choosing a particular Section 32 contract, for instance, ...

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