Dec 7 2006
The government is sending out "mixed signals" with regards to savings, following the announcement in the pre-Budget report of the imposition of tax on remaining funds in alternatively secured pensions (ASPs) at death, it has been claimed.
Having previously introduced ASPs as an alternative to compulsory annuity purchase at the age of 75, the government has now introduced a 70 per cent tax on funds remaining in the pensions upon death, Jupiter Unit Trust Managers reports.
The company notes that the move follows the popularity of the scheme with savers and thus describes the move as an opportunity missed by the chancellor.
Jamie Fergusson, pensions development manager at Jupiter, said: "If the government is genuinely interested in encouraging saving it should build confidence by allowing the development of a pensions regime that is perceived as simple and fair."
However, Abbey expressed hopes that the changes outlined in the pre-Budget report regarding ASPs would be seen as a "reasonable compromise" from the government that places the scheme as a true alternative to annuities rather than an investment vehicle.
