The ability to take tax-free cash should be prohibited in personal accounts, as this would cut the cost of tax relief and help subsidise the scheme, claims First Actuarial.
In its response to the pensions white paper ‘Personal accounts: a new way to save’, which closes tomorrow, the actuarial consultancy argues allowing individuals to take a lump sum from their personal account runs counter to the stated aim of providing income in retirement. The company claims refusing to allow tax-free lump sums, which since A-day can be up to 25% of the fund, would help cut the cost to the Treasury of granting tax relief on the new scheme and, as a result, suggests this saving could then be used to subsidise the running of the scheme. In addition, the firm claims by res...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- 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
