What a difference A day makes

EVERYONE INTERESTED IN pensions must be aware of a day i.e. 6 April 2006 when it is all change as part of the Government's claimed simplification of the pensions rules. It is difficult to be sure exactly how the new one-size-fits-all rules will work in practice but if history is any guide they will probably have much wider consequences than was envisaged in 2004 when the legislation was passed.

One key change is the taxation of pension surpluses which are the amounts by which the total fund exceeds a threshold which for 2006-07 will be £1.5 million. It appears that this tax will become payable on the excess over that figure once the pensioner begins to receive benefits from the fund and will be charged at rates that could be as high as 55%. While this article does not deal with the tax...