Pension News Standard Life Pension Cash ‘at Risk’

11 November 2005

UK employees could lose £3 billion in tax-free lump sums unless pension providers “take action”, says Standard Life.

The company says almost quarter of a million of its customers could be at risk from losing out on cash lump sums after A-day, when anyone taking retirement benefits will be limited to 25 per cent of the total value of their pension as a cash sum.

Standard Life has decided to gather information on customers it believes will be affected by the decision in order to pay out a lump sum when the individual retires.

Head of pensions policy at Standard Life, John Lawson, said: “This is a complex issue so we’ve taken a decision to identify which of our customers are likely to need our help.

“This will not affect only those who are high earners – many ordinary scheme members could be at risk of losing out,” he added.

On April 6th next year the government is to announce a new single tax regime for pensions.

Under the new act, the government says pensions will become simpler to understand but critics say the framework for the new self-invested pension regime is unlikely to be ready until 2007, leaving consumers confused over how it will affect them.

To read more about self invested pensions, click here.

Written by Editorial Team