This has been a long-standing bugbear for many an adviser and more particularly our clients taking withdrawals from their pensions. ‘Pension freedoms’ were introduced nearly ten years ago, allowing supposedly easy, uncomplicated access to pension funds of any size. Most have been very conservative (small c) and have not blown it all on Lamborghinis, as coalition Lib Dem pension minister Steve Webb said they might; with the average pension fund still less than £30k, most could anyway only afford a couple of Lambo tyres. When your tax-free cash is used up, any further withdrawals are taxable, and here’s the thing. If you were to make a taxable withdrawal of, say, £10,000, HMRC rules say that it must be assumed by the pension company that this would be the first of a number of monthly payments and taxed accordingly. It’s then up to you to claim back the extra tax, either by finding and filling in the appropriate form or months later via a tax return. Good for the tax-take figures, but a pain in the proverbial for most. And now it looks as though common sense is set to prevail. At last.
“Trade war: Stock markets rally as Trump rows back on Fed and China threats”
Yet another reminder, should one be needed, of how quickly things can and will change. A nod and a wink in the right direction from himself and/ or an underling can provide the solace the money men crave and turn a plummet into, if not a soar at this stage, then certainly a bounce.
