HMRC u-turns on income drawdown rules

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HMRC has backtracked on rules that could have left some investors trapped in poor personal pensions, in response to pressure from pension providers.

The draft of the Finance Bill published on 31 March said all savers switching pension funds to new providers after 6 April would become subject to new, stricter withdrawal limits when later going into capped drawdown. This would mean any transfer of uncrystalised benefits into a scheme in which chrystalised benefits were held would trigger the application of the new rules. Under the new rules, the maximum capped withdrawal from pensions is 100% of the GAD rate, rather than 120%, whilst the old five year longevity reviews have been replaced with triennial or yearly assessments. Pens...

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