TPAS Newsletter - September 2011
State Pension Age Update
The Government announced last year its plan to accelerate the State Pension Age (SPA) increase to 66. The legislation making that change should be passed in the next couple of months.
There have been two Government announcements this month that affect the current plans.
- Ministers are considering options that will prevent women from being penalised by the upcoming changes. Under the change, around 800,000 women will have to wait up to two years longer than expected. Pensions Minister Steve Webb said: "[We] recognise that pension age changes need to be fair. So although we stand by our plans to equalise men and women more quickly and to move to age 66 more quickly, I can assure you that we will do all that we can to ease that transition for the particular group of women most affected by the change." An announcement is expected in the next few weeks.
- SPAs will increase to 67 and then 68 over the next few decades. But this month the Government has announced that it is planning to accelerate these changes. The increase to 67 may happen from 2026, ten years earlier than the existing plan. Steve Webb commented "The timescales for 67 and 68 are too slow. If it is 67 in the mid-2030s we will be going backwards in terms of share of your life in retirement. The problem would be worse than 20 years before."
New Code Of Practice Published By The ABI
The Association of British Insurers (ABI) has this month published a new code of practice for insurers with the intention of stopping customers from automatically 'rolling' their savings into annuities with their existing providers.
Under the new code, insurers will no longer include application forms with their annuity communications. The ABI hopes this will encourage customers to shop around on the open market for the best possible annuity.
We have this month published three new factsheets, all dealing with tax and lump sums paid on death. There is one each for defined benefit, defined contribution and income drawdown arrangements.
We now have 11 factsheets.
- paying voluntary national insurance contributions - the extended rules
- changes to the Annual Allowance
- how to test pension savings against the Annual Allowance
- the Annual Allowance transitional rules for Defined Benefit schemes
- the abolition of the requirement to set up pension benefits by age 75
- the new flexible drawdown rules
- the new income drawdown rules for individuals already using income drawdown
- using a redundancy payment to pay into a pension
- tax and lump sums paid on death - defined benefit schemes
- tax and lump sums paid on death - defined contribution schemes
- tax and lump sums paid on death - income drawdown plans
If you have any pension questions, please feel free to contact us by calling our helpline on 0845 601 2923, emailing firstname.lastname@example.org or writing to us at 11 Belgrave Road, London, SW1V 1RB.