Be ready for new pensions rules
Jul 27 2005
A significant change in pensions legislation is due to come into effect in April 2006, but many small businesses are unaware of it and the possibilities it presents.
The imminent Pensions Simplification, due on 6 April 2006, also known as 'A-day', will allow people to invest their pension scheme in a wider range of investments; for example, residential property at home or abroad for the first time. This offers opportunities for small firms.
However, more than a third of UK SMEs are oblivious of the change, according to research from accountancy and business services group Tenon.
'The introduction of Pensions Simplification in April 2006 will give SMEs greater control to manage their pension portfolios, and give them the freedom to choose from a greater range of investments,' explains Peter O'Sullivan, director of Tenon Financial Services. 'It is concerning that one in three SMEs are not aware of the opportunities soon to be available to them.
'Despite being called Pensions Simplification, the changes actually appear quite complicated so we recommend that people seek advice now on what their options are to take advantage of the changes,' he adds. 'The self-employed should take maximum advantage of the changes. It is also worth ensuring the benefits of current pension schemes are protected; for example, if you want to use a pension to help get a mortgage on property, as the pre-A-day rules are a lot more favourable to borrowing money.'
For Tenon's guide to Pensions Simplification, Click here .
(27/7/05)
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