Pensions deadline looms for Armed Forces veterans

This week the government announced the legislative changes to the pensions system outlined in Chancellor George Osborne’s Budget in March – and the consequences for veterans of Britain’s Armed Forces.

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Under the new rules, members of private sector and funded public sector defined benefit (DB) pension schemes will be able to transfer to defined contribution (DC) schemes – such as a Personal Pension or SIPP – which allow much more freedom, including the option for those aged from 55-57 to access up to 100% of their pensions as a lump sum, or to leave 100% to loved ones.

However, members of unfunded public sector schemes such as the Armed Forces will not be able to transfer their pensions after April 2015.

The reason behind this apparent disparity is because unfunded schemes are supported by general taxation rather than relying on the reserves and assets set aside by funded schemes – which means that approved transfers could have a major impact on the Exchequer’s coffers.

If you served in the UK Armed Forces for more than 2 years and would like to find out about your options regarding your pension benefits, then get in touch with us now for a free no-obligation review.

Stamping Out ‘Stamp Duty campaign’

The ‘Stamp Out Stamp Duty campaign’ highlights that a quarter of home buyers are stung with a stamp duty bill for £7,500 or more.

Current stamp duty thresholds were introduced 10 years ago in 2003 and at the higher end of the scale were increased in last year’s Budget. Not only are they out of date, they do not take into account regional variations in house prices.

While home-buyers in London and the South East are hardest hit, the TPA points out that more people across the country are being hit by stamp duty at the 3 per cent rate, which acts as a barrier both for an increasing number of first-time buyers, as well as many hard-working families wanting to buy a new home.
Families buying a home for between £250,000 and £500,000 pay between £7,500 and £15,000 in stamp duty.

In 2012-13, over £4 billion was paid by home buyers in stamp duty, of which £3.6 billion was paid at a rate of 3 per cent or more. In the same year, 723,829 homes were bought, with more than a quarter (182,692) being liable for stamp duty at a rate of 3 per cent or more.

The campaign website enables people to find out how their area is affected and how they can send a customised message direct to their local MP, urging them to support a cut.

The Stamp Out Stamp Duty campaign is urging the government to ease the burden on homebuyers by cutting this unfair double tax. David Cameron and George Osborne promised to increase the Stamp Duty threshold in 2007. Six years later and three years into power it’s time that they delivered on that promise.

Speaking in October 2007 George Osborne said , “The next Conservative government will abolish stamp duty for almost all first-time buyers. Anyone who buys their first home for under £250,000 will pay no stamp duty. We will take 200,000 people a year out of stamp duty altogether; that’s one million people over a Parliament. And our message to the family working long hours, saving every spare pound to afford their first home is this: Your dream is our dream too. Your aspiration is our aspiration. We will get you out of tax and into your home.”

Chief executive of the TaxPayers’ Alliance Mr Matthew Sinclair, said: “Owning your own home is an important milestone, but for many families it seems harder and harder to reach. Ministers have done nothing to ease the burden imposed by stamp duty, which is an unfair double tax that gets in the way of would-be first-time buyers and others thinking about moving. Instead they have made things worse with new thresholds and new, higher rates. The government needs to act on ministers’ rhetoric about getting people onto the property ladder and cut this unfair tax.”