Wealthy savers to be hit by pensions tax grab
More than one million could be hit by punitive tax bills with lifetime allowance under threat
26 February 2021 • 9:51am
Wealthy savers are in the firing line of a Treasury tax grab with the Chancellor expected to freeze the threshold for the pensions “lifetime allowance”.
The allowance places a limit on how much savers can put into pension pots tax free and generally increases with inflation every year.
However, Rishi Sunak is reportedly drawing up plans to impose a stealth tax in the Budget on March 3 by freezing the threshold at its current level – £1,073,100 – until 2024, according to The Times.
‘I’ve taken £300,000 out of my pension before Rishi Sunak taxes it away’
Tax relief to lump sums, retirement savings are at risk in the next Budget
Pensions are too generous in their current form, experts have warned
Credit: TMG
The tax benefits of pensions are under threat as the Chancellor, Rishi Sunak, hunts for ways to plug the enormous hole ripped into the public finances by the pandemic.
Pensions are too generous in their current form, experts have warned, and retirement savings will make for rich pickings in a Treasury tax raid.
Some savers have begun to take drastic action. Paul Bleinham, whose name has been changed, took £300,000 out of his personal pension to shield his savings from any new tax penalties before the Budget on March 3. He withdrew £200,000 last spring and a further £100,000 in December in tax-free cash and planned to gradually feed it into his own and his wife’s Isas every year. The maximum you can pay into your Isa is £20,000 in a tax year
Pension trustees learn to strut as history repeats for Philip Green
Lessons have been gleaned from BHS limbo amid demise of Arcadia’s retail empire
14 February 2021 • 5:00am
Thousands of Arcadia pensioners received news after Sir Philip Green’s bust retail empire was sold off for parts.
Scheme trustees told them last week that £173m has been secured to help fund their retirements, thanks to a deal agreed in 2019 with the help of the pensions watchdog.
It means hopes are rising that the funding deficit present when Arcadia collapsed will be closed.
More money is expected from the sale of the Topshop and Dorothy Perkins brands to Asos and Boohoo for more than £300m.
A quirk in Government retirement rules has denied many retirees a full state pension
13 February 2021 • 5:00am
Thousands of British pensioners from the Windrush generation have been denied their state pension in full, and continue to miss out on tens of thousands of pounds.
Many from the Caribbean who came to work in Britain in the 1940s, 50s and 60s to help plug a skills shortage, and who have since returned home, have found their state pensions frozen.
There are more than 510,000 retirees worldwide with state pensions that will never rise in value. Retirees in Britain and certain countries, where there is a reciprocal agreement including the EU and America, receive annual increases under the “triple lock”. This has led to unusual rules in the Caribbean, where British pensioners living in Jamaica or Barbados see their pensions increase every year.