Savers warned of pension tax pitfalls
PENSION fund savers have been urged not to rush to take advantage of new freedoms allowing them to access their savings pots amid warnings of a potential "triple tax whammy".
People aged 55 and over now have new powers to make one of the most important decisions of their lives - what to do with retirement savings that they have spent decades building up.
The rules mean the 320,000 people who retire each year with a defined contribution pension are no longer required to use their pot to buy an annuity.
There are huge tax benefits from having the money in the pension
Ros Altmann, the Government's business champion for older workers, said the best advice she could give people was "do nothing".
She said people would be hit with a "triple tax whammy" if they take their money out - on withdrawal, on the new investment and by the loss of the tax-free status the money had in the first place.
"Leave it there ... there are huge tax benefits from having the money in the pension," she said.
"The idea is you can take your money out, not that you should take your money out. There's no rush."
