Pension scheme providers are being urged to help British workers retain their claim to tax-free lump sum pension payments.
When new pension regulations come into effect on April 6th 2006 – A-Day – those taking their retirement benefits will only be able to take a quarter of their total pension value as a tax-free lump sum, Standard Life points out.
It warns that in some cases, this total may be considerably lower than employees' current entitlement.
Pension scheme providers can protect workers' current lump sum entitlement by providing pension scheme trustees with important information like earnings over the last tax year, commencement date of employment and details of other pensions.
"This is a complex issue so we've taken a decision to identify which of our customers are likely to need our help," says the head of pensions policy at Standard Life, John Lawson.
He warns that it is not only high earners who are at risk of losing out, but that many regular pension scheme members could possibly miss out.
"We estimate that £3 billion in tax-free lump sum benefits could be lost unless adequate steps are taken to protect existing entitlements," Mr Lawson emphasises.
Take action, pension scheme companies urged
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Take action, pension scheme companies urged
Fri, 11 Nov 2005
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