View more on these topics

Short service refunds scrapped by October 2015

The Government has confirmed it will only allow short service refunds of 30 days from October 2015.

Currently, employers and members of defined contribution schemes can get a refund on contributions with up to two years’ service, but this will be cut to 30 days from next year.

Defined benefit schemes retain the right to make refunds, while personal pension schemes have never had the option.

The Government first announced its intentions to change the rules around short service refunds in 2011. It says about 20,000 refunds are made every year, a figure that was predicted to grow with the full roll out of auto-enrolment. The changes are part of the Pensions Act 2014.

Pensions minister Steve Webb says: “The days of people spending their entire career with one employer are largely over. Today, the average Briton has eleven different jobs in their lifetime and we need the rules to reflect this reality.

“If people change jobs regularly and ‘cash out’ their pension each time, they stand no chance of building up a decent pension pot. By abolishing short service refunds and developing plans for automatic transfers to help people keep track of their savings, this Government will build on its record of helping millions of people save more for a brighter, more comfortable retirement.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Rt Hon Sir Arthur Streeb-Greebling 23rd October 2014 at 5:10 am

    It has always been the case that members of DB schemes who left > 5 year’s service got their own contributions, (less tax), refunded. But their employers got to keep their CT relief ( and, of course the part of the fund). Always seemed a scam to me.

  2. Another,” just thought about this” then, how many more of these will happen ?

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com