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Article: Act now to protect your pension Changes to the law imperil the tax- free lump sum you can take from your fund, writes John Greenwood
- Article from:
- The Sunday Telegraph London
- Article date:
- January 25, 2004
- Author:
CopyrightCopyright 2004 The Sunday Telegraph London. Provided by ProQuest LLC. (Hide copyright information)
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FAILURE to ring-fence existing pension benefits rights before new
rules come into force next year could drastically reduce the amount
you can take as tax-free cash if you decide to switch to another
provider later on.
While personal pensions allow you to take no more than 25 per cent
of the fund in cash, many people in work-based schemes are entitled
to a much bigger tax-free lump sum on retirement.
Some lucky people are entitled to take their entire pension fund
as a tax-free lump sum, with no obligation to buy an annuity and no
income tax charge in the year it is paid out. Richard Jacobs of
Richard Jacobs Pension & Trustee Services cites the example of one
client, an estate agent, who was ...