SUPPLEMENTARY PENSIONS BUDGET 2012

The Bull

SUPPLEMENTARY PENSIONS
Pre-retirement access to funded Additional Voluntary Contributions
Individuals will be allowed a once-off option to withdraw up to 30% of the value of funded Additional Voluntary Contributions made to supplement retirement benefits. Withdrawals will be liable to tax at an individual’s marginal rate. The option to withdraw will be available for 3 years from the passing of Finance Bill 2013.

How will this work. If for example a self employed person has a pension fund. Would it be 30% of this amount?

Best username ever

Yes, what does this exactly mean. I have been paying into a company pension since I was 18 (34 now) am I able to access 30% of it if I needed to?

ibebanging

When in 2013 will this come into effect ?

ANXIOUS

Best username ever wrote: »

Yes, what does this exactly mean. I have been paying into a company pension since I was 18 (34 now) am I able to access 30% of it if I needed to?

Have you made additional contributions? These are different to your normal conts.

ANXIOUS

ibebanging wrote: »

When in 2013 will this come into effect ?

As per above from the passing of the finance bill, but I'd say it'll be approx six months before you see any money.

Henry Ford III

This seems to apply to employees only, and not to the self employed.

loadz

You can only claim back 30% of any voluntary contributions that you have made to top up your pension fund. These are separate to your normal pension contributions.

Liam D Ferguson

For what it's worth, I think that this AVC announcement is little more than an exercise in playing politics. Various people have suggested early access to pension funds in the past and have got nowhere to date. By limiting access to a very small group (just AVCs in Occupational Pension Schemes) I would expect that the take-up will be very small.

• Self-employed sole traders will be excluded excluded because they would use Personal Pensions and PRSAs.
• Company directors will be largely excluded because they would typically just put company contributions into an OP scheme. Little reason for a company director to make an AVC.
• PAYE Employees in PRSA schemes will be excluded.
• PAYE Employees in OP schemes, who make "ordinary" contributions will be excluded.

So that leaves what I would imagine to be a small group of eligible people, who are in OP schemes, have specific AVC funds AND are in financial difficulty or at least want to withdraw their AVCs even if they're taxable.

If I was a conspiracy theorist, I'd say that the Government can use this to appease whoever was pushing for early access to pension funds. The take-up will be low for the reasons outlined. Then if anyone suggests wider early access to pension funds in the future, the powers that be can say "Well we tried that in 2013 and the take-up was very low so we're not going to bother with it again because the demand clearly isn't there..."

ibebanging

I will be availing of the 30% ASAP.