Pension News
We will let you know the latest news about Pensions and any other news that we feel may be of use.
Update on Scheme Pensions
In our last news item we stated that we're not currently accepting applications for Scheme Pension from SIPP or SSAS arrangements. We have reviewed this position and are happy to say that we intend to start accepting Scheme Pension applications from Flexi SIPP members shortly. We won't be accepting Scheme Pension applications for members of SSAS arrangements however, as we believe that they are significantly affected by Pensions Act 2011.
Scheme Pension classifed as defined benefits
In early November, the Pensions Act 2011 received Royal Assent and became law. Shortly before enactment, some last minute amendments were made that altered the rules surrounding Scheme Pensions, making them classified as defined benefits, rather than money purchase. The changes appear to affect Scheme Pensions provided by SIPP and SSAS arrangements - increasing the costs and burden of running Scheme Pension through these vehicles.
Further reduction in Income Drawdown limits
The gilt yield (used to calculate the maximum income for Capped Drawdown) for September 2011 is at an all time low, meaning that maximum income for new Capped Drawdown cases in October will be squeezed even further. The effect of the new income limits introduced in April 2011, together with historically low gilt yields means that maximum income is around 30% lower now, compared to March 2011 (for a male aged 65).
Fixed Protection
Following confirmation in the Finance Act the Lifetime Allowance is due to reduce from £1.8m to £1.5m for any benefit crystallisations after 6th April 2012. It is however possible to apply for protection to maintain the lifetime allowance at £1.8m and HMRC have now made the application forms available at http://www.hmrc.gov.uk/pensionschemes/apss227.pdf
Beware new tax penalties
A subtle change in the self assessment tax penalty regime may have expensive consequences for Small Self Administered Pension Schemes.
Finance Bill 2011 changes
After the announcement last year the following key changes to Finance Bill for 2011 are listed.
Newcastle Building Society
Newcastle Building Society has changed the interest rate on the 30 Day Notice Deposit Account from 1.50% to 1.00% with effect from 18 November 2010.
Abolition of Compulsory annuitisation
The new coalition Government has now clarified its proposals for the abolition of compulsory annuitisation announced in their first emergency budget, consultation is underway with the intention that the changes will be introduced from 6 April 2011.
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InvestAcc Pension Administration Limited is registered in England and Wales. Company number 7118349. Authorised and regulated by the Financial Services Authority.
Note InvestAcc Pension Administration Limited does not provide financial advice.
