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Correspondence from readers on topical subjects.

Simplified pensions

You are correct in stating in your footnote to 'Hitting the wall' (Taxation 9 February 2006 page 468) that 'the idea that pensions were to be “simplified” is becoming laughable'. I should like to issue a small correction — it is laughable especially in the matter of the lump sum 'recycling' provisions upon which you remark. Recycling is entirely tax neutral and only describes the way in which cashflow is found wherewith to finance a given amount of pension fund purchase. To verify this all you need do is add up all the premiums paid through recycling of the lump sum and calculate the tax recovery appropriate to that sum and you will find it is exactly the same as anyone else paying the same sum by a different means perhaps by a loan from a...