Following the shake up for the pensions industry announced in this year’s Budget, Rowanmoor Group plc, the UK’s largest independent SSAS provider and a bespoke SIPP and Family Pension Trust (Family SIPP) operator says advisers are calling for a re-think in how pension scheme death benefits are taxed.
The Group polled delegates at its recent nationwide ‘New Insights’ adviser workshops, the first stage of its 2014 research programme to gauge advisers’ opinions on the new pension income flexibility proposals. The results showed that whilst the advisers polled were divided on whether the new regime would encourage a run on fund withdrawals, 80 percent believe that there should be an option to transfer lump sum death benefits tax-free to nominated beneficiaries’ pension funds.
In addition, Rowanmoor Group found that 70 per cent of the advisers polled feel there is a need to incentivise individuals to keep money within a pension wrapper, with the long-term aim of providing income in retirement, in order to counter the temptation of early withdrawal. Advisers also believe that both client behaviour and advice will be directly influenced by the way in which lump sum death benefits payable from pension schemes will be taxed, as this will be a crucial factor in determining when and how will be best to draw income.
Robert Graves, Head of Pension Technical Services at Rowanmoor Group plc said:
“The Budget announced many important changes affecting pensioners’ income flexibility but it will take time to see how these will affect the future retirement landscape.
“The first stage of our research shows that advisers have genuine concerns and these must be addressed. The overarching theme from this poll is that the current pension death-benefit tax regime needs to be reviewed, a subject that we feel very strongly about. We invite others to take part in the second stage of our research buy completing our online survey. The Government must listen to the industry if it wants to reduce the nation’s reliance on state benefits.”
Advisers wishing to share their views on the Budget 2014 pension reforms can find the survey at http://www.rowanmoor.co.uk/press-news/budget-2014-survey/