Creative Benefit Solutions, the specialist employee benefits consultancy claims that last week’s announcement of the relaxation of the anti-forestalling rules rectifies an important oversight made by HMRC when drafting the regulation. The rules were introduced in 2009 so that high earners can move between pension insurers then be forced to pay tax.
The original rules meant that anyone earning in excess of £130,000 would lose protection against the special annual allowance charge were they to switch from one insurer to another and be forced to pay tax. However, the announcement made last week through SI2010/429 means that those falling foul of this rule are now able to protect the level at which they pay contributions when transferring to a new arrangement.
In many cases the rules as they stood would have prevented senior individuals for benefiting from enhancements being introduced to their company pension arrangements simply as result of the fact that they had high earnings.
Neil Gough, client services director, says; “Creative Benefit Solutions believe that this relaxation is important in that it continues to encourage senior individuals to save for their retirement. If it had remained in place this particular aspect of the anti-forestalling measures would have prevented many people in the UK from switching to a better deal for their pension and, therefore, affected their long-term retirement plans. Whilst there are still some restrictions which will affect such people these are not seen to be overly onerous.”
He continues; “In affecting senior staff it would have been those who lead the decision making processes that would have been excluded from benefiting from new and fresh solutions and therefore could have led to decisions being postponed or abandoned for all their employees. This change was certainly warranted and we are pleased that our clients can now manage their pensions effectively and ensure they get the best deal for their retirement.”
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