To what extent have the pension freedoms brought in by the government been adopted by the public? With reporting in the initial phase being voluntary, statistics for the first four quarters since the scheme went live have been seen as indications only. However, Q2 of 2016 has seen the first set of compulsorily reported statistics and these have revealed that in that quarter alone 159,000 individuals withdrew a total of £1.77 billion from their pension pots.
At the same time the government has revealed that the free guidance service, Pension Wise, has had 2. 7 million visits, with nearly 75,000 appointments being carried out. Commenting on the statistics the Treasury’s economic secretary, Simon Kirby, said “Our pension reforms have already given hundreds of thousands of people access and responsibility over their hard-earned savings and we will continue to make sure that the pension freedoms work well for everyone.”
The fact that the scheme has proved so popular is a danger in itself. The rules in respect of pension fund withdrawals are complex, leaving individuals open to potential tax bills should they withdraw too much in any one financial year.
If you would like to speak to a tax adviser about efficient pension tax planning, please contact Newshams Tax Advisers on 0203 151 0650 or email us at firstname.lastname@example.org.