a cold calling ban will cut off a key source of pension scams whilst also sending a clear message to consumers that they should hang-up if they are cold called about their pension current legislation gives pension schemes limited scope to refuse a transfer to a scheme which looks like a scam, even if they have legitimate concerns as to the safety of a member’s savings. HM Treasury is consulting on clarifying the law so that firms can block pension transfers based on clear objective criteria single-member occupation pension schemes currently require no registration with The Pensions Regulator, and can be set up using a dormant company as the sponsoring employer. They are therefore an easy way for fraudsters to register a pension scheme with HMRC. HM Treasury is consulting on making it a requirement that only active companies can register a pension scheme.
The consultation will run until Monday 13 February 2017. Responses should be sent to PensionScamsConsultation@HMTreasury.gsi.gov.uk
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Tax-free Pension Advice Allowance 13 February 2017
The new Pension Advice Allowance will enable people to withdraw £500 on up to three occasions from their pension pots tax-free to put towards the cost of pensions and retirement advice from April 2017.
Following an 8 week consultation, the government’s response confirms that the £500 Pension Advice Allowance:
can be used a total of three times, only once in a tax year, allowing people to access retirement advice at different stages of their lives, for example when first choosing pension or just prior to retirement will be available at any age, allowing people of all ages to engage with retirement planning can be redeemed against the cost of regulated financial advice, including ‘robo advice’ as well as traditional face-to-face advice will be available to holders of “defined contribution” pensions and hybrid pensions with a defined contribution element, not “defined benefit” or final salary type schemes. can be combined with the £500 employer-arranged tax-free pensions advice. The use of one exemption does not prevent an individual from accessing the other
HMRC has published draft regulations and draft explanatory memorandum for a technical consultation. More information can be found in the tax information and impact note .
Comments on the drafts should be sent by email to pensions.policy@hmrc.gsi.gov.uk by 28 February 2017.
Interaction of the allowance with the tax exemption for employer arranged pensions advice From 6 April 2017 the government is also introducing a new income tax exemption to cover the first £500 worth of pensions advice provided to an employee in a tax year. It will allow advice not only on pensions, but also on the general financial and tax issues relating to pensions. The changes replace existing provisions which limited the exemption solely to pensions advice and was capped at £150 per employee per tax year. This tax exemption will be available for salary sacrifice arrangements between an employer and employee. Additionally, where an employer reimburses an employee for pension advice they have arranged, this will be covered by the exemption. It will be possible to combine this tax exemption with the Pensions Advice Allowance to enable individuals to access up to £1000 of tax advantaged financial advice. The use of one exemption does not prevent an individual from accessing the other.
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Consultation on security and sustainability of defined benefit pensions 27 February 2017
A review of the security and sustainability of defined benefit pension schemes in the private sector has been launched.
The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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