The Government's tax simplification project has produced six different regimes rather than one, says PricewaterhouseCoopers.
The financial services consultancy says last week's Finance Bill creates six sub-divisions – pensions in UK-registered schemes, employer-financed retirement benefit schemes, overseas recognised schemes, overseas unrecognised schemes, section 615 schemes and corresponding accepting schemes.
But Sipp specialist AJ Bell says the bill should be welcomed for confirming the abolition of compulsory annuity purchase and replacing it with the option of taking alternatively secured income at age 75.
From April 2006, ASI will allow a restricted form of income withdrawal beyond 75, with a maximum of 70 per cent of the prevailing annuity rate and a minimum of £1.
On death, any remaining funds can be used to fund pensions for relatives.
PricewaterhouseCoopers UK chief actuary Trevor Llanwarne says: “The fact that we are back up to six regimes and that over a quarter of the bill's 550 pages are devoted to pension issues illustrates how complex it is to actually deliver simplification.”
AJ Bell managing director Andy Bell says: “The Plymouth Christian Brethren have been in dialogue with the Treasury and the Inland Revenue over their fundamental objection to annuities. This has been instrumental in the decision to introduce ASI.”