Money News
The Chancellor has moved to clampdown on alternatively secured pensions (ASPs) by introducing minimum annual withdrawals and restricting the people to whom funds may be passed.
ASPs are used by people aged over 75 who prefer not to purchase an annuity. Hitherto, some have cited religious objections to buying an annuity, claiming that by pooling their money with others, it amounts to noting more than a gamble. But with the new measures due to come in, there will be far less incentive to use the religious excuse.
From April 6th next year, the minimum withdrawal will be set at 65% of the comparable annuity, while the maximum will increase to 90%.
The Treasury has also moved to ensure that in the event of the death of a pension scheme member any remaining ASP funds can only be used to pay dependents or a charity. In limited circumstances payments may be made to an employer. Payments outside these areas will be liable for an unauthorised payment charge of up to 70%.
06 December 2006 © Moneyextra.com
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