Pension savers have until 6 October to take advantage of the Government’s temporary relaxation of the ‘buddy rules’ on pension transfers.
Last year’s Finance Act relaxed the requirements for people who want to transfer to a new scheme to take advantage of the pension freedoms, as well as allowing them to retain their entitlement to greater than 25 per cent tax-free cash.
Previously savers had to find a “buddy” to make a block transfer with at the same time as them.
But the Government ignored industry calls for the relaxation to be extended indefinitely and members now have just a few days to take advantage.
A condition of the relaxation was members would have to take all their benefits from the new scheme as either an annuity or via drawdown before 6 October, or they would lose their tax-free cash entitlement.
Those who did find a buddy to transfer with are not caught by restriction.
AJ Bell technical services consultant Charlene Edwards says: “We had a lot of queries around the relaxation of the block transfer rules at the time so there will be many people that took advantage of them.
“Those people need to act now if they have not done so already, otherwise they will lose any entitlement to tax-free cash over 25 per cent of their fund which would undo the sensible steps they took in utilising the relaxation period.”