Treasury to net £900m in pension freedom tax

Savers unaware of tax implication in lump sum withdrawals

clock • 1 min read

The Treasury is set to net a windfall of £900m by April from tax paid by people accessing their pension savings in the first year of pension freedom.

Office for Budget Responsibility figures suggested the tax generated by pension freedom rules amounted to almost a third more than had previously been expected. Analysis had suggested the Treasury would collect about £700m in tax in 2015-16 as a result of the new rules, which allowed all direct contribution savers over the age of 55 unfettered access to their cash from April. FCA figures published in January showed 120,959 pensions were cashed in entirely in the months following the rule change (July - September), of a total 178,990 pots accessed. New figures from trade body the As...

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