NAPF comments on Chancellor’s proposal to abolish 55% tax charge on inherited pension pots
29 September 2014
The National Association of Pension Funds (NAPF) has commented on Chancellor of the Exchequer George Osborne’s proposal to abolish the 55% tax charged on some inherited pension pots, due to be announced at the Conservative Party Conference later today (Monday).
Joanne Segars, Chief Executive, NAPF, commented:
“Today's announcement is an eye-catching addition that is a natural follow on to the freedom and choice initiative mapped out by the Chancellor in his March 2014 Budget. While it may encourage some people to save more into their pension, assured they will be able to pass on the lion’s share without tax, the reality is that this is likely to affect only people with larger pension pots.
"What will affect millions of people is the Guidance Service which they will need to help them make good decisions when planning their retirement income. Beyond today's announcement the focus must be on making sure the Guidance Service is in place ahead of these changes coming into force next year. The proof of all these reforms will be in their implementation and how they affect savers and voters. With less than 140 days until the service must be up and running the clock is ticking.
"The Government also needs to keep hold of its promises about the annuity market, which the majority of savers are likely to still depend on for some of their retirement income. They should accelerate the review of the annuity market to ensure it is working well and can provide savers with products that offer good value."
Notes to editors:
The NAPF is the voice of workplace pensions in the UK. We speak for over 1,300 pension schemes that provide pensions for over 17 million people and have more than £900 billion of assets. We also have 400 members from businesses supporting the pensions sector.
We aim to help everyone get more out of their retirement savings. To do this we promote policies that add value for savers, challenge regulation where it adds more cost than benefit and spread best practice among our members.
Lucy Grubb, Head of Media and PR, NAPF, 020 7601 1726 or 07713 073023, [email protected]
Eleanor Bennett, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]