MPs tell FCA to research tax-free pension lump sum 'decoupling'

Further research and testing

Ayesha Venkataraman
clock • 2 min read

MPs have recommended that regulators probe further into the merits of decoupling the 25% tax-free lump sum from the rest of the pension pot, in a Work and Pensions Committee report on pension freedoms.

The report on pensions freedom, published on Tuesday (18 January), entitled Protecting pension savers—five years on from the Pension Freedoms: Accessing pension savings, is the second of three planned reports and focuses on the decisions people take when they access their pension savings. The committee was presented with many arguments both in favour and against decoupling the 25% of a pension pot. In favour of this move, consulting actuaries firm LCP pointed out how savers typically sought short-term gain by accessing their pension pot with "the goal of accessing tax-free cash, only ...

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