You are here: Home - Uncategorized -

Pension warning spells out the dangers of switching

Written by:

Members of work pension schemes have been warned about the dangers of accepting inducements to transfer out of their pension plans.

The Pensions Regulator is sending out the pension advice that it is worried about staff being offered inducements to move from a final salary scheme to a money purchase one. Employees who accept the offer risk getting a poor deal while the employer saves money.

HM Revenue & Customs has changed its own advice on the issue and says that cash inducements will now be taxed, on the basis of pension advice it has received.

Chief executive of the Pensions Regulator, Tony Hobman, said: “While we recognise that employers may not break any laws when they offer an inducement, whether it is cash payments or an increased transfer value, we are worried that some transfers are being proposed to avoid an employer’s full pension liability.”

The last 10 years have witnessed rapid growth in the number of employers that have been closing their final salary schemes – or defined benefit schemes as they are also known – and putting new staff on to cheaper money purchase schemes.

The Pension Regulator and the Pension Protection Fund announced recently that 58% of all final salary schemes are now closed to new members.





Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Royal Mail share scheme snubbed by Government

The Government has rejected a proposal from Royal Mail management that 20% of its shares in the company be distributed...