Member Article

Concern over Treasury plans to reduce MPAA

National IFA, LEBC Group is concerned that the proposed reduction by HMRC of the Money Purchase Annual Allowance (MPAA) from £10k to £4k a year from 6 April will be detrimental to certain groups of older workers. In particular those who through no fault of their own, may need to access their pensions early in order to cope with personal and family circumstances.

These include:

Older workers taking time off to look after elderly or sick relatives. Those facing health issues themselves and not able to work full time. Those made redundant and forced to re train or accept a lower paid job. The self employed and “gig economy” workers who may have gaps between contracts.

LEBC Director, Kay Ingram said, “Our concern is the unintended consequences of restricting future tax relief on pension savings for the groups we have highlighted could have undesirable and severe restrictions.

“We do not believe that abuse of pension savings tax relief is widespread which appears to be HM Treasury’s motivation for change, as other rules such as the lifetime allowance and restricted annual allowance for higher earners act as a disincentive.”

LEBC has made its submission to HM Treasury on this matter and has written separately to Peers and MPs on the Treasury and Work and Pensions Select Committees highlighting its thoughts.

As a national firm of independent retirement advisers, LEBC has since 2015 advised 35,000 individuals from all walks of life on the merits or otherwise of accessing their pension plans under the “Pensions Freedoms” legislation introduced in 2015.

This was posted in Bdaily's Members' News section by LEBC Group Ltd .