The Institute and Faculty of Actuaries responds to the Taxation of Pensions Bill announced by the Chancellor of the Exchequer

“Yesterday’s announcement by the Chancellor of the Exchequer on Uncrystallised Funds Pension Lump Sums marks a further step in the most revolutionary changes to UK pensions for over a century.  The new flexibility will offer people the opportunity to take retirement income in new ways according to their specific circumstances.  The Institute and Faculty of Actuaries recognises the benefits that many people will gain from these landmark reforms.
 
However, increased flexibility must go hand in hand with increased personal accountability.  Average life expectancy has been increasing at more than two years a decade so people are surviving to ages which were previously regarded as unlikely.  Average life expectancies are also just that: half will die sooner; half will die later.  The financial implications of running out of money in later life could be significant.  New pensioners must be aware of this risk to their standard of living  - particularly with increased potential long term care costs to bear.
 
It is essential therefore that those who offer advice, or guidance, to new pensioners make them fully aware of these financial implications as well as the associated tax and estate planning issues."  
 
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For further comment please contact Annette Heninger at the IFoA on 020 7632 2126 or annette.heninger@actuaries.org.uk. 

Editorial notes:

About the Institute and Faculty of Actuaries
 
The Institute and Faculty of Actuaries (IFoA) is a royal chartered, not-for-profit, professional body. 
 
Research undertaken by the IFoA is not commercial. As a learned society, research helps us to fulfil two of our royal charter requirements; to further actuarial science and serve the public interest.  
 
Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.
 
Members of the IFoA have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s.
 
Members are governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of actuaries in society.
 
The IFoA is available to provide independent expert comment to the media on a range of actuarial- related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions.