Advisers have backed Government proposals to abolish rules that prevent people aged 75 and over from claiming tax relief on pension contributions.
Chancellor George Osborne announced plans to fundamentally redesign the UK private pensions system in his Budget speech earlier today.
Under the proposals, anyone aged 55 or over will be able to take their entire defined contribution pension pot as cash from April next year.
The move is designed to make pension saving more flexible and hand greater control to individuals.
In addition, the Government says it will review rules that stop people aged 75 and over from claiming tax relief on their pension contributions.
The Budget documents say: “The Government will explore with interested parties whether those tax rules that prevent individuals aged 75 and over from claiming tax relief on their pension contributions should be amended or abolished.”
Syndaxi Chartered Financial Planners managing director Robert Reid says: “Given the ongoing trend of people working past the magic 65, it is clear that any arbitrary end to tax relief is no longer appropriate. This proposed change should be applauded because it will right an obvious wrong in the pension rules.”
Rowley Turton director Scott Gallacher says: “The current system that prevents people aged 75 and over claiming tax relief on contributions seems arbitrary and in need of reform.
“In the next 20 years or so more and more over 75s will still be in work so it seems unfair to discriminate against them.”