What is 'A' Day?
A Day refers to 6th April 2006. This is when the government plan to change eight sets of tax rules that currently govern pensions to just one set of rules, hence it also being referred to as ‘pension simplification’.
These proposals were first announced in December 2002 and were included in the Finance Act 2004.
The changes are wide-ranging and radical and, once implemented, will dramatically simplify the way pensions operate in the UK. They have been widely welcomed and we, too, believe that they will significantly improve the situation.
Unlike previous changes, the new regime will apply to everyone. In the past, whenever changes were made to the pension rules, those on the existing regimes were left alone. Whilst this avoided changes being introduced retrospectively, it led to the layer-upon-layer complexity that we currently have and which is choking the system.
In order to get away from all this, there will be just one single taxation regime for all pension schemes and, whilst all accrued pension rights up to A-Day can be protected, some people - primarily high earners whose benefits are not currently restricted by the ‘earnings cap’ - will lose out heavily in that they will be severely restricted in their scope to earn further pension from A-Day.
To find out how you will be individually affected, please contact us by completing our online enquiry form.
