Budget 2014: Planned rise in minimum age to access private pensions
“As the dust begins to settle on Wednesday’s speech, one piece of information that seems to have flown under the radar is the planned rise in the minimum age to access private pensions – from 55 to 57 in 2028 and then increase inline with the Basic State Pension (BSP) age going forward. The increase in BSP age is always an issue, but is usually of little concern to the majority of our clients as the bulk of retirement provision will come from private schemes. Now with each BSP increase we are being forced to work longer; this contradicts the apparent aim of increasing flexibility,” comments Chris Hogarth, Financial Planner at Kingston Smith Financial Advisers.
He adds: “The changes in access to an individual’s pension fund mentioned yesterday were very interesting, but failed to clarify the position on death, with further details on this to be released. All we know is there will be a consultation on the 55% tax charge on death which is set to be cut, a positive move indeed. The detail on this will be very interesting as if the same format is taken to apply a marginal rate, then who’s marginal rate – will it be the deceased member? If not, then careful consideration needs to be given to the rate applied, as to avoid encouraging maximum fund withdrawal as quickly as possible to side step a death charge.”