’Scrapping’ the tax-free lump-sum would not be a simple as it sounds. Nothing in the wonderful world of pensions, ever is. In 2006 ‘Pensions Simplification’ was the New Big Thing. One of its ‘simplifications’ was to limit tax-free cash to 25% of the pension fund, as some types of scheme before then allowed more than a quarter, in some cases all of it to be taken tax-free. If you have one of those, your rights are preserved; great for you, but hugely complicated for us, as most providers have been taken over several times since then and many don’t have a clue. If tax-free cash goes altogether, it can and will only be for new plans. Which will add yet another layer of complication to an already madly confused and confusing system, which even the qualified struggle to comprehend.
“Chancellor scraps 45p income tax change in ‘embarrassing’ U-turn”
I wish this U-turn had been for the right, or for even vaguely altruistic reasons. For instance, ‘we’re using those funds to pay for a bit of social care and free-up some hospital beds, treat refugees vaguely humanely and triple-lock increases to benefits as well as pensions’.