Pension freedoms could bring in £19.2bn of tax in next decade
Surging drawdowns may reduce overall tax take.
The UK pension freedoms, which came into effect in 2015, could increase tax revenue by as much as £19.2bn ($25.2bn, €21.8bn) over the next decade, a report from the Pensions Policy Institute (PPI) has suggested.
The report, entitled How will the evolving retirement landscape impact tax and benefits?, predicted some individuals could end up paying 200 times more in tax, admittedly from a very low base, when they make a full withdrawal at state pension age compared to purchasing an annuity.
The PPI said the £19.2bn figure is based on the next 10 years of retirees accessing their pension pots in a similar pattern to that seen in the three years since the pension freedoms were launched, so the pattern and thus the amount could change significantly. Please link to International Adviser to read the full article by John Lappin.