pensions

IFAs hoping for further details on the Inland Revenue's proposed simplification rules will be highly disappointed by the Budget published today as it offers little new on the changes facing pensions in the next couple of years.

People deferring their state pension for at least a year will from April 2005 be able to take their benefits as a lump sum, the Budget says.

Consumers should be wary of unlocking their pensions as there is a high risk of a reduced level of income in retirement, warns the FSA.

The Inland Revenue must publish the final changes to its pension simplification paper before the end of the month if A-day 2005 is to become reality, warns Steve Bee.

One flat-rate benefit paid out to all UK long-term residents over the age of 65 could work as a simple and sustainable solution to the current problems with the state pension system, says the Pensions Policy Institute.

Some 10,000 people will be hit by the Inland Revenue's proposed £1.4m lifetime limit when the new pension simplification legislation comes into force, according to the National Audit Office.

Most young people believe investments and pensions are not relevant to their own financial position, and are instead aimed at "older people" according to research conducted by the FSA.

Proposals set out in the Pensions Bill could see IFAs having to advise their clients to leave their occupational pension schemes, despite that being exactly what happened during the last pension mis-selling scandal, warns an industry expert.

The government should provide all British citizens with a basic state pension regardless if they have worked or not, says the National Consumer Council.

The Inland Revenue should change its latest proposals on death benefits, urges the Society of Financial Advisers, as the rules are both unequal in their treatment of different pension types as well as "too complex".