MoneyTalk (July 2004)

by Arch Financial Planning Limited

MAJOR GOVERNMENT CHANGES TO PRIVATE PENSION PLANNING

Earlier in the year we wrote about what will be the most radical shake-up to tax and other rules governing pensions within the UK for well over a decade. Now that the Finance Bill has been published we are able to provide updated information. What we know for certain is that these changes will take place with effect from 6 April 2006.

The intention is to have one universal tax regime for all pension products which will replace at least eight different sets of tax legislation that apply to pension schemes. In particular it removes the differences between occupational pensions and personal pensions.

These changes will have far reaching effects for you if you have not yet retired. Part 4 of the Finance Bill deals with pensions and contains 131 pages. In addition the Inland Revenue has published 295 pages of ‘explanatory notes’ on this section of the Finance Bill. We would encourage you to read about the key points on our website www.arch-fp.co.uk/major_changes_to_pensions.htm. You will also find a section in our notes headed ‘Take Action Before 6 April 2006’. To make it easier for you to study them at your leisure we have included a version on our website which you can print off in your own home or office.

Please let us know if you would like to discuss any aspect of your pension planning. If you already have an Arch adviser then please contact him or her, otherwise email direct@arch-fp.co.uk or telephone 01483 204600.

Risk Factors

Any information given in these notes relating to Pensions legislation, Income Tax legislation and Social Security benefits, is based on our interpretation of the current proposals for changes to legislation and Inland Revenue practice. This information is provided for general information purposes only and should not be relied upon in place of personal financial advice.

In particular you are warned that levels of tax and tax reliefs and also State Benefits that may have been referred to, are subject to alteration and, in any case, the value of such reliefs and benefits may depend on an individual's circumstances.

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Arch Financial Planning Limited

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