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NEWS WRAP – Shadow Foreign Secretary’s Plan for Public Sector Pensions

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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* 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.

Other News

Modelo 720 (Overseas Asset Declaration) It’s that time of year again

Spanish FlagIf you are resident in Spain (if you live here more than 183 days in a calendar year, the Spanish tax authorities and in turn the UK HMRC will class you as Spanish resident) and held assets outside Spain as at 29 December 2017 worth over Euro 50,000, and you haven’t already declared them on a Modelo 720, you need to so by the end of March.

You may ask why should you bother, well unless you want a huge fine and possibly tax audit (they can legally go back to 2012) it is in your best interests to do it.

Some of you may still be under the impression that the reporting of assets is not a legal requirement; if this is the case then sadly I have to tell you, you are mistaken. On 15 February 2017, the European Commission accepted that Spain has the right to require residents to declare overseas assets. While the Commission disagrees with the severity of punishments for late or inaccurate submissions, the requirement to submit the Modelo 720 form is not under challenge. The EU and the UK say it is a legal requirement.

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