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Chartered Institute of Taxation warns Government over stakeholder

The Chartered Institute of Taxation has warned the Government that its stakeholder pensions proposals are littered with taxation traps.

It says that if stakeholder pensions are to be truly successful and accessible to all, further changes will be necessary.

The institute says the Government&#39s proposal to open up pensions to those not in work, could in practice mean that by contributing they are in fact volunteering their savings to be taxed.

The CIOT says that if the Government wants to encourage people to take up stakeholder, instead of investing in shorter term savings vehicles, it must guarantee them they will not suffer from changes in taxation.

The institute claims that further work is needed to protect the pensions of the self-employed and people relying on annuities and occupational schemes.

It says part of the answer would be to restrict the requirement to buy an annuity to an amount equal to the minimum income guarantee. It also believes pension stamps should be introduced to encourage lower rates of contributions.

CIOT personal taxes sub-committee chairman Anne Redston says: &#34We welcome the opening up of pensions to those who are not in work. But we must point out that by contributing to a pension under the proposed rules these individuals will, in practice be volunteering to have their capital taxed.&#34


Scottish Equitable goes on the pensions campaign trail

Scottish Equitable is launching a campaign to help IFAs develop their pension business in the run up to stakeholder.To support the campaign the life office has produced a business development pack containing promotional items, printed sales aids and a selection of approach letters for IFAs to use to attract new business from new and existing […]

Cartered Istitute of Taxation calls for simpler tax system

The Chartered Institute of Taxation is calling on Chancellor of the Exchequer Gordon Brown to simplify the tax rules for pensioners in his next Budget.The Low Incomes Tax Reform Group, a sub-committee of the CIT, believes the Chancellor is sympathetic to their demands.These include the issuing of tax exemption certificates to the poorest pensioners taking […]

Pensions Management Institute fears defined benefit schemes could be sidelined

The Pensions Management Institute fears the proposed tax changes to pensions will marginalise defined benefit schemes.It is warning that unless concurrent membership is allowed, the proposed tax changes will erect a barrier between stakeholder pensions and DB schemes.To overcome this, the PMI says a way must be found to let members of defined contribution and […]

Pru axes 1,500 staff

Prudential is axing 1,500 jobs in preparation for stakeholder pensions, according to the Financial Times.Scottish Amicable, the IFA arm of the Pru, is to shed 200 jobs.The Pru will cut nearly a quarter of its direct sales force, shutting all 103 support branches. ScotAm cuts will also be made through its salesforce.Prudential chief executive of […]


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