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There is no surprise that the Budget contains little on pensions as major changes have been made to State pensions over the last year, while radical changes are presently under consultation with regard to private pension provision. The Government introduced the State Second Pension in April 2002, while the Pension Credit is due to be implemented from October this year. The Government&#39s intent to make significant changes to private pension provision has been outlined in the Green Paper, and more particularly the consultation paper on pensions tax simplification, both of which were issued at the end of last year.

The DC tax regime continues to provide a number of highly attractive tax planning opportunities, while pension planning will remain very much to the fore in two other areas:-

  • planning for the introduction of the new simplified tax regime. Unlike earlier pension reforms the new simplified tax regime, due to be implemented in April 2004 (or in 2005), will apply to members of all existing pension tax regimes. Its centrepiece is the introduction of a new Lifetime Limit on a member&#39s retirement fund that may benefit from a tax favoured treatment. There will, however, be transitional provisions for members of existing schemes and many members with retirement funds at or near the proposed Lifetime Limit will be seeking advice on what pension provision to make in anticipation of the new simplified regime
  • the increases to NI contributions for employers, employees and the self-employed from April 2003 will open up pension planning opportunities. The increase in employer and employee NI contributions will make the use of salary sacrifice to fund pension contributions even more attractive.

The increase in Class 4 NI contributions for the self-employed will potentially result in an increase in the individual&#39s 2003/04 balancing payment and their first payment on account for 2004/05 both due on 31 January 2005. The impact of this can be reduced or eliminated by the payment of a suitably sized personal pension/stakeholder pension contribution in 2003/04.


Barmy army order

Hargreaves Lansdown regimental sergeant-major Peter Hargreaves&#39 chest swelled with pride and the hope of medals last week when he received an MoD-headed letter confirming his call-up to the 3rd Airborne Infantry Division stationed in Iraq.The Captain Mannering of the West Country was seen with a skip in his step after getting the order to report […]

Half of IFAs risking employee litigation

Nearly half of IFAs are risking employee litigation with 47 per cent admitting they don&#39t fully comply with all aspects of employment law according to a survey by law firm Peninsula. The survey showed more than half of those surveyed, 54 per cent, were taking short cuts and only 34 percent were aware of new […]

FSA consumer panel warns of suite risks

The Sandler suite of products will fail to meet the needs of low to middle income consumers and runs a real risk of misselling as currently proposed the FSA&#39s Consumer Panel has warned.The Panel says face-to-face advice is crucial to encouraging saving and its absence from the proposed Sandler sales regime means it cannot support […]

Neptune joins Skandia fund platform

Neptune, the fund management company previously known as Orbitex, has joined Skandia&#39s multi-manager platform.Neptune&#39s market leading balanced and UK equity funds are now available to Skandia&#39s MultiBond, MultPension, MultIsa, MultiPep and MultiFund investors.Skandia investment marketing manager Ian Thomas says: “Since its launch May 2002 Neptune has quickly built itself an excellent reputation in the industry. […]


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