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Pension transfers under threat

Inland Revenue draft pension transfer regulations will make it even more difficult for people to move their pension savings from an occupational scheme to a personal pension, claim industry experts.

The move will see a tightening of the rules which ensure individuals do not exceed the maximum they are allowed to transfer from one scheme to another. But industry sources say the change will complicate an already confused situation.

They believe the proposals will affect three times more people than at present, including anyone earning more than £45,900 who wants to transfer away from an occupational scheme.

Currently, any controlling director or anyone who has earned more than £91,800 in any of the last eight years is subjected to a test to ensure that they are not overfunding their pension.

The industry is concerned that these regulations were overlooked as they were brought in with a raft of others in early July.

The changes are expected to come into effect at the end of the year.

Many individuals transfer their pension from occupational to personal schemesas they near retirement because the tax regime governing personal pensionsis more relaxed.

Scottish Equitable manager of pensions development Steven Cameron says: “We think the Inland Revenueis going too far in restrict-ing how much can be taken across.

“These people have done what the Government wants them to do in saving for themselves and now they are punishing them for it.”

Clerical Medical pensions strategy manager Nigel Stammers says: “I looked intothe Revenue&#39s own statistics. Those earning up to £50,000 outnumber those earning up to £100,000 by about threeto one. If that ratio is mirrored in pension schemes, it is asignificant increase in workload for IFAs.”

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