Changes to rules around withdrawing small pension pots as lump sums could lead to large scale abuse of the system, Hargreaves Lansdown has warned.
Today the Treasury announced it would extend the rules which allow people to withdraw occupational pension pots of below £2,000 as lump sums to include personal pensions as well. The Treasury had originally restricted the commutation of small pots to occupational schemes because these required an employer to be set up, and so were harder to arrange as part of a scam. Personal pensions have no such restriction, and for this reason, the Treasury said investors can only commute two £2,000 personal pots over their lifetime, to prevent abuse. But Tom McPhail, head of pensions research a...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes