Advisers see client backlash after lump sum tax scare

People are concerned about their tax-free lump sum

clock • 3 min read

Advisers are working hard to combat client fears following recent speculation that pension savers may lose their 25% tax-free lump sum following the April 2016 Budget.

The Sunday Times recently quoted ex-pensions minister Steve Webb who said that the tax-free lump sum, accessible after aged 55, could be on the ‘brink of extinction'. He went on to say that given its cost of £4bn it would be easy to see that the Chancellor might get rid of it in the 2016 budget. The tax-free lump sum could be removed as part of wider changes to pension tax relief. The government is currently assessing whether to overhaul the current system.  A 'pension ISA' system or flat-rate relief between 22% and 33% are being considered. This speculation has caused a great d...

To continue reading this article...

Join Professional Adviser for free

  • 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

Join

 

Already a Professional Adviser member?

Login

More on Pensions

Britain's pension ambition is rising - just as cash resilience slips

Britain's pension ambition is rising - just as cash resilience slips

'2026's 'pension resolution' wave is real. But so is the cash-cushion squeeze'

Phillip Wickenden
clock 02 February 2026 • 6 min read
Government again rejects Waspi compensation after review

Government again rejects Waspi compensation after review

DWP: Creation of compensation scheme would be ‘highly impractical’ and ‘time-consuming’

Martin Richmond
clock 29 January 2026 • 3 min read
Pension transfers and the FCA: A well-meaning intervention that risks falling short

Pension transfers and the FCA: A well-meaning intervention that risks falling short

'The secret is giving people the right information at the right time'

Rachel Vahey
clock 28 January 2026 • 4 min read