McPhail calls for reform of trivial commutation

Under current rules, if the sum of an individual's pension funds is less than £18,000, it is considered ‘trivial', and if the individual is aged between 60 and 75, the money can be 'commuted' or withdrawn. Most of that sum would be taxed at 20% as income, whilst 25% would be tax free. Additionally, there is another trivial rule for ‘stranded' occupational pension pots, which can be withdrawn as lump sums if they are less than £2,000. McPhail, who is also the chairman of the Pensions Income Choice Association (PICA), says the system needs to be simplified to improve consumers' acces...