Goodbye Safeguarded Rights

Finally, this anomaly has been abolished, as a result of the Pensions Act 2008.

As of 6th April 2009, those in receipt of a Pension Credit from a Contracted Out pension scheme will no longer be discriminated against and will simply receive Protected Rights as a part of their transfer.

To recap:

Safeguarded Rights could not be taken until the age of 60 and did not offer the possibility of a Pension Commencement Lump Sum (Tax Free Cash).

The good news is that this is a retrospective piece of legislation, so those who have been sitting on Safeguarded Rights and are currently over 50, have access to benefits and lump sums that were previously unavailable. However, from 2010, the minimum age will rise to 55.

So, who is going to tell these people? Was there an IFA involved and will that IFA have picked up on this change?

Bear in mind that most people who have received an external Pension Credit from an occupational pension scheme are likely to be sitting on these rights and may well have discounted any possibility of accessing pension benefits before age 60 as a result.

It’s not often that Family Lawyers have an opportunity to make contact with their former clients. This, it strikes me, is a golden one.