Thousands of employees with occupational pension schemes may be able to "claim a bigger tax-free lump sum on retirement", says Jessica Bown in The Sunday Times. Skandia, the pension provider, claims to have found a "hidden gem" in amongst "the technical papers issued by HMRC on the back of the budget changes".
Since A-Day (6 April 2006), the level of tax-free cash available to members of such schemes has been set at a maximum of 25% of the value of their fund.
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Perhaps the best news is that the protected entitlement is automatically increased by the 20% increase in the Lifetime Allowance up to 6 April 2012 (it went up from £1.5m to £1.8m), regardless of how well the fund has performed since. Secondly, it is increased by 25% of any positive growth in the fund since A-Day.
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Thousands of savers with £250k pensions take cash over tax-free money and IHT fearsWith a record £70 billion withdrawn from pensions in the year to March, experts are concerned savers are making knee-jerk decisions without advice that could affect their long term wealth
