Our viewpoint

A 2014 Christmas
wish not yet granted

The Chancellor delivered his Autumn Statement this week (Wednesday 3 December) and, after the Budget earlier this year that rocked us all with the announcement of a pensions revolution, there were no unexpected pension shocks.

In non-pension news, the reform of Stamp Duty on purchasing residential property is of course hitting the headlines – with the move from the old system of one rate applying to the whole purchase price with jumps according to the price, to incremental rates on tranches of the purchase price.

Immediately after the announcement, the HMRC website featured an online calculator showing the old and new stamp duty calculations – where people just slot in date of purchase and purchase price and it gives pre and post change figures.

Which begs the question, why doesn’t the HMRC do the same for the new pensions flexibilities coming in from April 2015? An online calculator to help thousands of retirers with money purchase savings understand the tax consequences of their new freedom to cash out all their fund in one go?

It could work by asking people to type in how much they think their income will be in the 2015/16 tax year. And if they then typed in what they planned to cash out from their pension  pots during the tax year, it would calculate what bits would be tax free, taxable at 20% or taxable at 40%. 

And they could play with and change the entries to check different plans and to see how they could reduce their tax bills just by staggering their withdrawals over a couple of years or so. 

Wouldn’t that be a nice Christmas present for people who could save thousands of pounds with a little help?