HMRC to reduce up front tax take on cash from small pensions

This is the result of changes to the HMRC tax code for small pension pot savers to be implemented on 6 April 2013, the Daily Mail reports today. Normally when taking a pension the saver will have to buy an annuity - which provides an income for life from the savings. But anyone with less than £18,000 in total pensions can take the whole lot as cash. The taxman calls this ‘trivial commutation'.  Wealthier savers with small pots worth less than £2,000 can turn up to two of these into cash. Whenever you take a pension you can get 25% of it tax-free, and the rest is taxed. Curren...