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Spring 2010 Newsletter


Content

Leading article...

We can't go on like this...

General tax...

The name is Bond

Blessed are the givers

Excuses, excuses

PAYE the penalty

Silver and gold

Moving goalposts

Doctor, doctor...

Something phishy

Pension problems

Tax dot com

Unpleasant discoveries

Fair's fair (at last)

Chartered taxpayers

This year, next year

VAT...

Focus your mind

Flat rates aren't flat

Reverse the charges

Flapjack flash

Ready set ECSL

A lofty idea

Law items...

I want my lawyer

Not on my holiday

A grey area

No difference

Moving goalposts


Before personal pensions were introduced in the 1980s, tax-advantaged pension schemes couldn't pay out until your 60th birthday - unless you were in a job where people generally retire earlier, such as a sports player. In a fit of optimism about the future, the 1988 rules allowed people to take the benefits from pension policies at 50 - although building up a fund large enough to retire by that age has been a challenge for most people.

Now the age is changing again: from 6 April 2010, the minimum retirement age moves up to 55. Anyone aged between 50 and 55 at present has the opportunity to cash in a policy - taking a tax-free lump sum and starting to draw a pension - before 6 April, but if they don't, they will have to wait until their 55th birthday. Maybe in five years it will go back up to 60, and retirement will continue to disappear over the horizon.

Some people may want to take advantage of this now, but the rate of annuity that can be achieved at such a young age is usually very low. Pension fund values have taken a hammering over the last few years, and we can only hope that they will recover further in the next few - this may not be a good time to crystallise the value by cashing in the benefits. But it's important to know that the opportunity is there, and it's going away for a few years.

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