- Home » Expat News » UK budget 2014 good news for expat pensioners and early retirees
UK budget 2014 good news for expat pensioners and early retirees
| Published: | 19 Mar at 6 PM |
Want to get involved?
Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
Become a Local Expert and contribute articles.
Get in touch today!
For expats and would-be early retirees still in the UK, the news that, from 2015, pension savers will no longer forced to buy annuities in order to draw down their cash is the best to come from Britain’s coalition government since it was elected.
The change followed extensive media criticism of the way annuities are being sold, both by insurance companies and by financial advisors. However, the major insurance companies won’t be breaking out the Bolinger, as both specialist retirement income providers and general insurance companies saw their shares drop by as much as 30 per cent immediately the news reached the public domain.
Worst affected was Just Retirement Group, down by 30 per cent, with Legal and General following at 11 per cent and the much-criticised Friends Life’s parent company Resolution down by 7.3 per cent. From April next year, early retirees over the age of 55 will be able to withdraw the full value of their fund in cash, with the first 25 per cent tax-free.
The remaining 75 per cent will be taxed at each saver’s marginal rate. According to experts in the field, the changes will rock an annuity market already unsteady due to bad publicity.
In finance, there’s no good news without bad news, and the sting in the tail is that public sector employees will be banned from taking advantage of the new rules by transferring out of their defined benefit scheme. The reason behind this, according to leading pension specialists, is that large numbers of public sector workers were likely to choose to transfer from their current DB schemes to a different defined contribution arrangement.
The change followed extensive media criticism of the way annuities are being sold, both by insurance companies and by financial advisors. However, the major insurance companies won’t be breaking out the Bolinger, as both specialist retirement income providers and general insurance companies saw their shares drop by as much as 30 per cent immediately the news reached the public domain.
Worst affected was Just Retirement Group, down by 30 per cent, with Legal and General following at 11 per cent and the much-criticised Friends Life’s parent company Resolution down by 7.3 per cent. From April next year, early retirees over the age of 55 will be able to withdraw the full value of their fund in cash, with the first 25 per cent tax-free.
The remaining 75 per cent will be taxed at each saver’s marginal rate. According to experts in the field, the changes will rock an annuity market already unsteady due to bad publicity.
In finance, there’s no good news without bad news, and the sting in the tail is that public sector employees will be banned from taking advantage of the new rules by transferring out of their defined benefit scheme. The reason behind this, according to leading pension specialists, is that large numbers of public sector workers were likely to choose to transfer from their current DB schemes to a different defined contribution arrangement.
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
