The sweeping changes to pensions announced in the budget could have a fundamental impact on the way that pension funds are viewed on divorce.
The increased triviality sums and proposed flexibility to extract funds at marginal rates of income tax rather than the punitive rate (55%) currently applied, coupled with the abolition of the minimum income requirement, present the opportunity to view Defined Contribution schemes as a source of staged lump sum payments for anyone at or approaching age 55.
In many ways this flexibility may make defined contribution schemes more attractive than defined benefit schemes for potential pension sharing.
As ever the devil will be in the detail but with the direction of travel firmly mapped out, the decision as to which pension fund offers best value will undoubtedly need some additional thought!!
For further information on this and other budget changes relevant to your clients please don’t hesitate to call us.