April 30th, 2019 / Insight posted in MKS Comments

Kingston Smith says HMRC is the winner as record number draw-down from their pension pots

Following the introduction of the pension freedom rules in April 2015, figures released yesterday* show a big jump in people raiding their pensions during 2018/19.

“A total of 539,000 people drew money from their pension in excess of their tax-free entitlement – a 44% increase from the previous year,” says Tim Stovold, head of tax at Kingston Smith. “The total amount withdrawn was more than £8bn – a 23% increase on the prior year. This means a huge windfall for the Treasury as additional income tax will be collected on these payments. But government will be keeping a close watch on these rules to ensure that the overall trend does not cause pensioners to run out of money in their retirement.”

*Pension Flexibility Stats April 2019

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