View more on these topics

£100k cost as Revenue thwarts early retirer

The legislation behind the Government&#39s Pensions Green paper looks set to claim its first victim, with a 41-year-old man prevented from taking pension benefits at 50 despite having the funding.

The Department for Work and Pensions&#39 plans to raise the minimum age for taking retirement benefits from 50 to 55 in 2010 will result in former human resources officer Mike Bagley losing up to £20,000 a year.

Bagley, who was made redundant in August 2002, paid his severance payment into his final-salary scheme. He stands to lose £100,000 when the retirement age is raised.

Bagley will not be able to retire until 2016 and will miss five years&#39 pension payment.

He paid £63,000 of his severance payment into the British American Tobacco scheme on his redundancy. The scheme rules do not allow an increased pension if his payment is deferred by five years.

The DWP Green Paper says the rule change is designed “to signal that working up to age 55 at the very earliest is the norm”.

IFAs have branded raising the limit as a pointless gesture that hits people who have made provision and detracts from pension saving.

Bagley says: “There will be a five-year gap for me to fund, which I have not planned and funded. If the Green Paper takes effect as written, I will lose £100,000 in lost pension.”

An Inland Revenue spokesman says: “We cannot comment on the cases of individual taxpayers.”

Richard Jacobs Pension & Trustee Services director Richard Jacobs says: “This guy may be stuck. But in this case, everyone loses out, even the Inland Revenue. If someone can afford to retire at 50, why make them wait?”


Man Investments – Man AP Unison

Type: Capital guaranteed bond Aim: Growth by investing in arbitrage. managed futures, directional, equity hedge and long/short equity hedge fund strategies Minimum investment: Lump sum $50,000, euros 50,000 Guarantee: Capital returned in full at end of term regardless of performance of underlying investments Place of registration: Bermuda Investment split: 100% in arbitrage. managed futures, directional, […]

Take care of customers

Few challenges facing financial institutions in the coming year are as significant -or as neglected – as improving meaningful interaction with customers.When the going gets tough, let us all batten down the hatches and hide – an understandable reaction from the financial services industry but short-sighted. Lead-generation initiatives are still rife but, as Gartner pointed […]

IFAs back mutual PI and with-profits

An overwhelming 80 per cent of IFAs support the idea of a mutual fund to solve the professional indemnity insurance crisis, according to a survey conducted for Money Marketing by The Exchange.The support for a mutual scheme comes despite the fact that the FSA and trade bodies such as Aifa say it is unlikely to […]

Means to a trend

In the last couple of articles, I have looked at trends in male and female life expectancy over the last few decades and highlighted the implications of the significant increases we have seen.I considered the impact these trends could have on the demand from clients for conventional annuities or flexible retirement income options such as […]

Tax year-end planning for annual allowance

Last tax year-end there was a lot to think about in relation to planning. The introduction of the tapered annual allowance and the implications of moving to a fixed pension input period, the reduction in the lifetime allowance and potentially applying for protection, and the concern about changes to tax relief, to name a few. […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm