The Finance Bill was published on Thursday and it has some interesting bits about pensions.
From 1 January 2024, you will not be able to implement a new personal pension plan. If you have an existing personal pension plan you can continue to contribute to them until maturity. They will be allowed to die out naturally.
That means any personal pensions will now have to go through a PRSA only.
Previously, you had to mature a personal pension or PRSA before age 75, otherwise it was locked (except for paying tax owed) until your death. That is being removed. Under the Finance Bill, that time limit is being removed.
This is bigger than it sounds. It means that having a PRSA is all you need for the rest of your life.
It also points to the death of the ARF. Why would you need one if you have a PRSA and can do everything from that policy? Those in Master Trusts and retiring will have the option of the ARF or a PRSA. But they will do the same thing. I am sure there will be lobbying from the industry on the loss of a very lucrative revenue stream.
The Pensions Authority’s plans are coming to fruition. Seven years ago, the published a paper on simplifying pensions. PRSAs and Master Trusts are now the two main types of pensions, both of which are under the remit of The Pensions Authority.
Interesting times ahead.
23 October 2023