Lloyds TSB: New pension rules boost savings

07 February 2006
Britons are set to save more after the new pensions rules come into effect on April 6th.

The shake up in regulations will give people tax-free access to 25 per cent of their money in unused pension funds, while the rest can be used to buy an income or remain invested.

Lloyds TSB Private Banking found that 33 per cent of people would use the money to pay off their mortgage, while a fifth would use it to help their child invest in property.

A further 18 per cent would also use the money to save, by investing it in an inheritance fund for their kids.

Mark Cheshire, chief executive at Lloyds TSB Private Banking, said the changes in pensions rules would give Britons "more financial freedom and flexibility" and that individuals needed to identify what was the best way of "making your money work for you".

The news comes shortly after IFA Promotion urged Britons to save more in
order to avoid sliding further into debt.

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