Following "A Day", there will be one single unified tax code for pensions,
which will more closely resemble the defined contribution code.
The government’s control over pensions will be exerted by restricting
how much can be contributed into the scheme each year, and how much can be
accumulated there in total.
Benefits From Pensions
Under the new regime, members can take two types of benefit from a registered
pension scheme. These are:
- A tax-free lump sum of up to 25% of tax-privileged scheme funds;
- Income, normally for life, provided by the remaining tax privileged funds
(a "pension").
The income may be in the form of an annuity purchased using available funds.
For those who have objections (religious or otherwise) to the pooling of
mortality risk inherent in annuities, it will be possible to provide equivalent
levels of income through "alternatively secured" routes. From a member’s 75th
birthday, all income must be provided either through an annuity or an
alternatively secured method; prior to this, members may choose to vary their income annually between broadly-set limits. |
