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The Chancellor’s pensions reforms

CII/PFS Policy Briefing

Publication date:

26 March 2014

Last updated:

22 September 2017

Author(s):

Policy and Public Affairs

A policy briefing setting out the details and implications of the Government's widely-publicised pensions reforms announced in Budget 2014.

Freedom of choice and the "right to guidance"
 

As part of his 2014 Budget statement, the Chancellor announced major reforms to the decumulation market.

These reforms are aimed at enhancing customer choices at the point of retirement, and assisting customers in making those choices. They come as part of a wider package encouraging savings.

The Chancellor's speech and a detailed Treasury consultation set out:

  • reforms to the taxation rules so that all consumers are offered the full range of options at the point of retirement (lump sum, drawdown or annuity) regardless of the size of their accumulated pension; 
  • an interim step of easing the trivial commutation and other limits to improve flexibility; and
  • "the right to guidance": offering to all consumers retiring with DC a pension at-retirement guidance that is impartial, face-to-face and free at point of use.

This announcement was part of a package of measures around the Chancellor's savings agenda, which included reforms to individual savings accounts (ISA) limits and changes to national savings and pension bonds.

Next steps 

The Treasury has published a consultation alongside the Budget statement, setting out the Government's thinking in this area in more detail. Responses are due by 11 June.

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Related items
 

Pdf icon small CII Policy Briefing: Budget 2014 (March 2014)

Pdf icon small CII/PFS Policy Briefing: FCA thematic review on retirement income products (February 2014)

Pdf icon small PFS Consumer Research on the Retail Distribution Review (February 2014)

Pdf icon small Tax tables: Budget 2014

Pdf icon small Tax data: Budget 2014 

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.

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