Abolishing tax-free cash 'highly unlikely' and withdrawals market impact minimal

‘UK pensioners are too small a fish in the global monetary system’

Sahar Nazir
clock • 3 min read

Outright abolition of the pension commencement lump sum (PCLS) is “highly unlikely” and even a large wave of withdrawals would have little effect on the UK stock market, experts have told PA.

LCP partner Steve Webb said that most savers hold only a small proportion of their pension in UK-listed equities, meaning fears of a pre-budget sell-off triggered by speculation over future PCLS reform are largely unfounded. Questions submitted by numerous financial advisers during a recent Professional Adviser inheritance tax (IHT) webinar centred on whether speculation about future cuts to PCLS could prompt savers to withdraw en masse, potentially forcing large-scale sales of pension assets and hurting markets. However, Webb, along with other experts said the premise misunderstands ...

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