call us
Glasgow
+44 (0)141 221 2984
Edinburgh
+44 (0)131 225 6366
Stirling
+44 (0)1786 451745
Dumbarton
+44 (0)1389 765238
Hamilton
+44 (0)1698 459444
Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

THE PENSIONS ACT 2014

27 June 2014

On 15 May the Pensions Bill 2013 finally became the Pensions Act 2014 after more than a year working its way through parliament. It is a major piece of legislation, which will ultimately create widespread change to the pension landscape.  The main areas the Act covers are:

  • Single tier pension The Act legislates for the introduction of the new single tier state pension from April 2016. The Department for Work and Pensions (DWP) says that this is worth £148.40 a week in 2014/15 terms, although transitional rules mean that few people will initially receive this amount.

 

  • State pension age  The Act increases the state pension age (SPA) to 67 by April 2028. It also provides the framework for regular reviews of the SPA based on changes to life expectancy.

 

  • Bereavement support payments  From 2016/17, the complex existing bereavement payments system will be replaced by a single lump sum, plus tax-free monthly payments lasting for one year only. The widowed parent’s allowance, payable until a child ceases to be eligible for child benefit and currently worth £111.20 a week, will disappear for new claimants, bringing a long term reduction in government expenditure.

 

  • Private pensions The Act introduces a range of changes to private pensions, many of which will not take effect immediately. These include provisions to allow for automatic transfer of small pension pots, a ban on refunds of pension contributions to short term employees, and powers to cap charges for certain pension schemes.

The Pensions Act 2014, together with forthcoming reforms to how retirement benefits can be drawn, mark a generational overhaul in pension rules. Whatever retirement plans you have, they will almost certainly need to be reviewed.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. The value of tax reliefs depends on your individual circumstances. Tax laws can change.

If you would like any further information, please contact us by email or call on 0141 221 2984.