Scot Wid saying S2P/Serps lump sum announced
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dunstonh
Posts: 116,467 Forumite
Received a publication from Scot Widows today saying that the Govt has announced plans to allow up to a quarter of protected rights funds as a tax free lump sum.
It does say that the plans have not yet become law but this is the first time I have seen an insurer publish that it is likely to happen.
AFAIA, the option was being discussed but the Govt were against it.
So, contracting out may provide a lower Additional pension in retirement (based on todays terms) but it may be attractive to those looking to build up a tax free lump sum and do not need the income.
However, i reckon its a bit early for an insurer to make glossy publications saying that.
It does say that the plans have not yet become law but this is the first time I have seen an insurer publish that it is likely to happen.
AFAIA, the option was being discussed but the Govt were against it.
So, contracting out may provide a lower Additional pension in retirement (based on todays terms) but it may be attractive to those looking to build up a tax free lump sum and do not need the income.
However, i reckon its a bit early for an insurer to make glossy publications saying that.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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So, contracting out may provide a lower Additional pension in retirement (based on todays terms) but it may be attractive to those looking to build up a tax free lump sum and do not need the income.
Not sure I understand this? ??? Do you mean that someone who wants to throw money away just in order to avoid paying some tax might be better off contracting out?
Or are you suggesting that someone who believes that they will only live for a short period after age 60 might be better of contracting out to get the cash lump sum? ;D
It does seem a bit premature for glossies to be produced. Perhaps they thought that preemption would result in their getting more business?
Obviously they have yet to realise that good IFAs like you are not swayed in any way by glossy publications, free football tickets or past performance statistics.
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Got another one in todays post from Norwich Union.
The Glossy is actually published by the ABI.
Those that are likely to be higher rate taxpayers in retirement or have a high enough income where income is not an issue, they may prefer to contract out of serps to take advantage of the tax free lump sum as the capital may be more beneficial to them.
It's just a potential scenario.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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