George Osborne plans pension raid

23 February 2016

george osborne There's rumours that George Osborne is planning what is being dubbed a 'raid' on the tax-free lump sum perk which is being utilised by pensioners.

Pensioners are already looking at a reduction of the principle of tax-free pension saving, with the full higher rate of tax relief being removed. Looks like the tax-free lump sum could also be getting the chop as well, thanks to a reworking of the ISA system.

This tax-free business is basically when someone retires, and they get the chance to withdraw 25% of their savings, without paying any tax on it on the way in, or out, of their pot.

Basically, you can take a chunk and go wild, before deciding what to do with the rest of it.

However, that could be all changing, as George Osborne looks to balance the books, and he's noticed that there's a lot of money floating around in pensions. Billions, in fact, according to government figures. Of course, there's new freedoms with pensions, which have become more flexible recently, however, for those who haven't retired yet, new taxes could be awaiting you.

The Treasury are looking at ways of reforming this relief, and it might be scaled back, or indeed, replaced with a new ISA-ish system. Concerning the latter, it means money that was previously untaxed, would now be taxed on the way into your pot (not on the way out, mercifully, but that might change in due course).

The consultation that the Treasury are doing, regarding all this, will finish and any changes will be announced during Osborne's Budget on 16th March.

TOPICS:   Investments   Government

1 comment

  • Warwick H.
    From Thatcher on very Govt has plundered the Civil Service and public pension funds then they have the nerve to bleat on about "black holes" of course there are you greedy bunch created them. Its about time M.P.s started to contribute to their over generous pension funds instead of being like the parasites they are on the tax paying public.

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