The key themes around these changes will be to consider the income tax planning, or from where income is drawn, and structures that will need to be put in place to help protect pension assets that have been paid tax-efficiently on death for the longer term.
Murray Smith, Sales and Marketing Director, commented on the changes: “We believe this is a real positive step for the state, pension fund holders, their families and other beneficiaries. These changes, together with the new full access provisions, will encourage greater long-term saving, particularly as the use of income drawdown as opposed to the annuity route will become more commonplace.”
In the past, the business has seen legislation drive planning that is at odds with the true rationale for pension saving. Where the tax on death was as high as 82%, this drove individuals to actively run down their pension assets to avoid leaving a large residual asset base subject to such inordinate taxes.
Murray added: "The key themes around these changes will be to consider the income tax planning, or from where income is drawn, and structures that will need to be put in place to help protect pension assets that have been paid tax-efficiently on death for the longer term."
Mattioli Woods believes these legislative changes will create a need for new thinking, and the dynamic of how individuals structure their income in retirement will need to change, focusing on the interaction of personal and pension assets.
Ian Mattioli, Chief Executive, added: “We have long advocated the personal ownership of pensions and the ability to move them from one generation to the next, which is both in the interest of members and the government. The opportunities for pension scheme members will be significant but it is clear that sound advice, as well as considered product selection, will be key.”
Mattioli Woods is well placed to provide the advice required and to ensure the delivery and management of best-in-class products to meet these changes.