Only around 10% of our clients were lucky enough to have, or be likely to have, pensions which exceed the lifetime allowance of £1m or so. So that makes the proportion of the population as a whole which this affects still smaller, which I guess is why it seemed like a good idea to introduce it in the first place. It was the Rule of Unexpected Consequences which made it a problem, as those most likely to have pensions big enough to be taxed turned out to be senior civil servants and hospital consultants with good, old fashioned, gold-plated, government-funded pensions; and many of them decided to retire early rather than lose a big chunk in tax. The next Unexpected Consequence, however, is that Labour have promised to un-scrap it so my guess is that, instead of sticking around, many of those doctors will decide to retire now and get out while the going is good.
“Annuity rates soar to 14-year high”
I was asked this week whether annuities are now ‘a good investment’. They’ve been recommended very rarely in recent years, since ‘pension freedoms’ allowed pretty much unlimited drawdown on pension funds and anything left to be passed on to beneficiaries free of Inheritance Tax.