Fears for over 55s affected by Covid as they now face being hit by pension restrictions

According to latest figures from the Pensions and Lifetime Savings Association (PLSA), 7.3 million British people have a defined contribution pension but it is unknown how many over 55s have been dipping into it to tide them over during the pandemic.

Fears that this age group may have turned to taking benefits from their defined contribution pension as a temporary source of income to get by during the pandemic has led some in the industry to call for a change to the allowance.

When it comes to topping it up again, they could find themselves in trouble as the Money Purchase Annual Allowance is capped at £4,000 a year, so if they’ve taken out £4,000 for example, they won’t be able to put £4,000 back in.

Steven Cameron, Pensions Director at Aegon, said: “There are widespread concerns that the Money Purchase Annual Allowance of £4,000 has been set too low.”

READ MORE:  Income tax and National Insurance receipts soar as tax hike looms


See also  State pension age: Can you get extra payment? Some could get up to £4635 a year from April


Please enter your comment!
Please enter your name here