The regulations simplify the process of making transfers between different types of pension schemes; cover arrangements for existing occupational pension schemes to convert to the new tax rules; and list the permissible investments of schemes (including the new individual pension accounts).
‘These regulations pave the way for the single tax regime offering people the opportunity to save for their retirement using good value, flexible pensions,’ said economic secretary to the Treasury, Melanie Johnson
According to the government, the streamlined transfer rules alone will cut the running costs of pension schemes by around £36m a year.
The process for transfer payments set out in the regulations will ease the lump sum restrictions on transfers from occupational schemes to a personal pension scheme. These restrictions will now apply only to controlling directors and to those who are age 45 or over, whose earnings also exceed the maximum amount of earnings from which pensions contributions can be made (known as the ‘earnings cap’ – currently £91,800).
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