Treasury in 'major U-turn' over plans to fine DC savers who access pots

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The government has dropped plans to fine savers who access defined contribution (DC) pots under changes announced in the Budget but fail to alert all their previous pension providers.

In what has been described as a "major U-turn" the Treasury tabled an amendment Taxation of Pensions Bill on 24 November, relaxing some of the strictures introduced in October. The original proposal was to fine savers £300 if they accessed their money without contacting all providers within 31 days, then £60 a day up to a maximum of £3,000. This was to ensure that providers took account of the tax implications when flexible pension pots were accessed causing the annual tax relief allowance to be reduced from £40,000 a year to £10,000. The latest amendment extends the deadline for i...

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