Finance Bill 2011 Updates

As part of our commitment to continuously improve Paraplanning Online and ensure it remains the leading and most innovative suitability report writing solution available on the market; we are pleased to announce that the PPOL standard text has been updated to reflect the pension announcements from the Treasury on 9th December 2010 as part of the consultation process for the Finance Bill 2011, which are due to come into force from 6th April 2011. A summary of which can be found below:

• The effective requirement for members of registered pension schemes to secure an income, usually by purchasing an annuity with their pension fund, by age 75 is to be removed.

• Under current legislation any entitlement to a Pension Commencement Lump Sum (tax free cash) must be taken by age 75 or this entitlement is lost. Under the new rules, individuals will be able to draw their lump sum benefits after their 75th birthday.

• A new retirement framework of Capped and Flexible Income will replace the existing income limits for Unsecured Income and Alternatively Secured Pension. Capped Income will operate in a similar way to current Unsecured Income, other than the 120% GAD maximum level income that can be withdrawn is to be replaced with a new maximum level equating to 100% of the prevailing annuity rate. Flexible Income will remove the limit on the annual income that can be withdrawn from a pension fund, provided a minimum lifetime pension income of £20,000 per annum has been secured.

• The tax rate on lump sum death benefits from an Unsecured Income arrangement will increase to 55%.

• There will no longer be a minimum income limit for unsecured pension from age 75. Currently, when using an Alternatively Secured Pension, the minimum income level is 55% of an amount calculated by the Government Actuaries Department. The maximum limit of 90% is also being effectively removed.

A library of all of the updates and upgrades that have been applied to the PPOL online Suitability Report solution since its release in February 2008 can be found on our website.