Member Article

Money Purchase Annual Allowance Reduction

National IFA, LEBC Group (LEBC) is disappointed that the Government have chosen to reduce the allowance for pension savings, for those older workers who need to access their pensions early.

In its evidence to the Government’s Consultation, LEBC warned of the problems this could cause to many vulnerable groups.

These include those who:

• Give up work to care for elderly relatives and then retum to the workplace later.
• Older workers made redundant who may need to access their pensions while they look for work
• The self employed whose earnings fluctuate and who especially in the early years may need a combination of pension income and profits to make ends meet
• Older works whose health prevents them from working full time or in a high pressured job and need to access pensions to fill the income gap.

LEBC which has advised over 35,000 individuals on pensions freedom access since 2014 hopes that it is not too late for the Government to change its mind to make exemptions for individuals in these circumstances.

Kay Ingram, LEBC’s Director of Public Policy said “We will continue to press the case for flexibility to be given to these vulnerable groups who through no fault of their own have needed to top up their income with pension savings but may wish to rebuild their pension pots later if their circumstances change. This change is particularly harsh for the three million carers who are playing a big part in providing social care for family members and who will be penalised for doing the right thing. The retrospective aspect is especially unwelcome.

“There are still ways in which access to pensions funds can be gained without falling into this tax trap but it means that those facing this choice will need more than ever to seek professional advice.”

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