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You may be forgiven for thinking regulations in respect of workplace pensions has little to do with SIPPs, yet recent proposals from the FCA could catch many thousands of SIPPs in the workplace net.
Staveley will be a familiar name to many. The test case for IHT treatment of pensions following transfer in ill health has been in the news many times since Mrs Staveley’s passing all the way back in December 2006.
It has recently been announced that divorce laws will be changing.
It seems a long time since we had an annual allowance (AA) of £255,000. These days most pension savers are restricted to £40,000, but the money purchase annual allowance (MPAA) and the horribly complex tapered annual allowance (TAA) impose significant further restrictions for many. HMRC’s pension contribution statistics for 2016-17 tax year give us the first indication of the impact of the tapered annual allowance, and it’s not pretty.
Automatic enrolment (AE) has, by and large, been a success story. Opt outs have been fewer than predicted and the 10 millionth employee has been auto-enrolled, according to figures recently released by The Pensions Regulator (TPR). It’s also been good to see TPR getting their teeth into a few unscrupulous employers that have flouted the rules to show they mean business.
It’s the time of year when all good advisers will be talking to their clients about making the most of any unused allowances, and this will often include using the annual allowance (AA) for pension contributions. But are there times when the advice should actually be NOT to use it?
2018 has been a quiet year in the world of pensions - no seismic changes or hacking of allowances makes for welcome relief.
The basic premise on contributions made to pensions is that once the money has gone in, you can’t get it out again until you reach retirement age (or earlier ill health or death). There are very few circumstances when exceptions can be made, and if a refund is made other than as permitted by HMRC, then it would be classed as an unauthorised payment with charges totalling up to 70% of the amount refunded.
With September’s CPI figures now being released we know what next year’s Lifetime Allowance (LTA) will be - £1,054,800. Whilst hardly a dizzying increase we are at least crawling in the right direction after years of being pegged back. I get a few surprised looks when I remind people that the original version of Finance Act 2004 included a clause that the standard lifetime allowance could only increase.
I was going to open by commenting that it’s the time of year when the budget rumour mill starts kicking into action, but of course this will only be the second Autumn Budget, so we’re more accustom to these things happening at the start of the year.
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