Her solution? Giving former public sector workers with less than two years of established pension rights the ability to immediately access 75% of their fund as a lump-sum.
She further suggested a staggered expansion of the proposed scheme. If the initial programme proved successful, it could be extended to those who had four years of service, then six years, and then eight years, finishing at ten years by the end of the Parliament.
Ms Thornberry stated that the scheme should be tax-neutral and provide no tax advantage. She acknowledged that although it would prove relatively costly in the short-term, it would make economic sense in the long-run.
Such a scheme may make economic sense for a future government, but if it were to be taken up, recipients of the potentially only small to medium pension pots would need pensions advice in order to make the right choices in respect of their savings.
There is an obvious danger that offering lump sum payouts may see that money removed from individual retirement strategies and this could deplete retirement income in the future.
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Whether you need guidance on consolidating several small pension pots, transferring a defined benefit pension or if you just want to review your options, we can help.
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* https://www.politicshome.com/news/uk/political-parties/labour-party/opinion/house-commons/109907/emily-thornberry-mp-government Accessed 21-02-20
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
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When an expat is faced with the question of what to do with their pension, there are several options available to them. And it’s important to understand everything that could be beneficial for your pension pot because very few countries offer their citizens high standard pension systems, as shown by the latest Melbourne Mercer Global Pension Index, which ranks the pensions provided by the governments of 30 countries.