When it all changed . . .
Posted: 24/02/2011 15:45:48 by
Global Administrator | with 0 comments
Martin Tilley states: "When I first started in the pensions industry some 28 years ago, one of the first rules drummed into me was that the tax reliefs granted on contributions and growth within a pension scheme were allowed as the proceeds would provide an income in retirement for the life of the member.
Indeed back in those days, annuitisation was compulsory to ensure this."
More recently, the Financial Services Authority have made it very clear to Advisers, that where income withdrawal is being used, the level of withdrawal should be set such that it should be sustainable for the life of the member.
How then does the introduction of a Minimum Income Requirement and the ability to utilise Flexible Drawdown to strip a fund until empty fit with this previous thinking?
Despite members complaining that they could never get hold of their capital, a mindset has developed that an income will be payable for life. Faced now with the opportunity many of those we have canvassed to date have shown little interest, possibly whilst we retain a top tax rate of 50%.
Only time will tell……..