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Eversheds comment: Welcome changes to UK DC pension rules

  • United Kingdom

    21-07-2014

    Commenting on the UK Chancellor's statement summarising the key elements of the Treasury's response to its consultation on the changes to tax rules for DC pensions, Francois Barker, head of pensions at law firm Eversheds, says:

    "The decision to require independent organisations to deliver the promised guidance guarantee to members as they approach retirement is the right one. This means that individuals will be able to have confidence in the impartiality of the guidance they are receiving. However, a lot of work needs to be done between now and April next year to ensure that the guidance and the modes of delivery are ready and fit for purpose.

    "It is also pleasing to see that the Government will continue to allow transfers from the vast majority of DB schemes (including funded public sector schemes) to DC schemes. The Budget was all about giving people flexibility and choice and banning DB to DC transfers would have sent out a very confusing message. The safeguards announced should help to ensure that individuals are in a position to make an informed decision about whether or not to transfer. However, the failings identified in the FCA's report on Enhanced Transfer Values, which has also been issued today, will need to be addressed to ensure that the financial advice that members receive is appropriate."

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