11th April 2014

Aegon welcomes HMRC’s response to the Budget changes

HMRC’s response will help customers reverse their annuitisation decisions. This in turn will give customers more time to review their options, seek advice, and to benefit from the new retirement choices set out in the Budget.

Kate Smith, Aegon Regulatory Strategy Manager says

“A number of our customers are looking to review the decisions they’ve recently made about their annuity. Now HMRC has provided the clarity we’d hoped for we’ll move forward immediately to support customers who would like the chance to reflect on their retirement decisions in light of the Budget changes and proposed new tax rules.

“We’re now able to put customers back into the position they would have been before buying their annuity. This will allow customers to keep the tax-free cash sum, take advantage of the £30,000 triviality rule, or defer taking income until next April to benefit from the new flexibilities. 

“Previously customers had six months from taking their tax free cash sum in which to make a decision about how to take the remaining funds. If no decision was made within this timeframe, the customer risked a 40% or more tax charge on the cash sum already paid out. We’re delighted that the HMRC has listened to our concerns by extending the six-month period to 18 months. This gives customers the opportunity to use the full flexibilities without causing financial hardship by forcing customers to return their tax free cash sum.” 

Budget, Pensions, Retirement