Threat to 25% lump sums

jamesd

HarryD wrote: »

Sounds like another good reason for not putting all your savings eggs in the SIPP basket. Who knows what a future (e.g. Labour, SNP, LibDem coalition!) government might do to pensions, LTAs, tax relief, lump sums...

A balance of SIPPs and ISAs spreads the risk.

The person is 55 already. This means that they can pay money into the pension and almost immediately take out the tax free lump sum to put that into the ISA. In this situation it is likely to be better to use the pension first then withdraw lump sum(s) to put the money into the ISA, instead of going to ISA first.

In such situations the normal grandfathering practice for decisions that have already been made are likely to provide substantial protection, though not a guarantee.

Orwell

Thanks for comments. One would hope that any rule changes would not be retrospective on funds already committed, but to only target new money would mean deferring the tax take effect for some years and we know how the Labour party (and others) like to spend our pension money on gold-plated index linked DB pensions for their glorious public sector.

atush

they did lower the age from 50-55 to access DC pensions, but there were some years time lag before they did so.

In general with DB pensions the changes are not retrospective.

ffacoffipawb

atush wrote: »

they did lower the age from 50-55 to access DC pensions, but there were some years time lag before they did so.

In general with DB pensions the changes are not retrospective.

Lower? They increased it you mean.

kidmugsy

ffacoffipawb wrote: »

Lower? They increased it you mean.

Yes, increased. That was Mr Brown, wasn't it? Were the two Eds (Two Eds are worse than one) part of his Treasury Team at the time?

atush

I do believe so.