Advisers have warned a significant number of their drawdown clients will be stuck in poor value pension schemes for years to avoid a 55% tax penalty the HMRC assured providers "wouldn't be an issue".
Providers and advisers have both slammed the “grossly unfair unintended consequence” of rule changes following last month’s retirement age rise from 50 to 55. It means those aged 50-54 in unsecured pension (USP) schemes face an unauthorised payment charge of a huge 55% if they transfer to another pension scheme or annuitise. AJ Bell marketing director Billy Mackay says his company spotted there might be a problem in the legislation months ago, with many providers warning the wording of the new rules was ‘ambiguous’, but HMRC assured him it “wasn’t an issue”. Mackay says: “For HMRC ...
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