Suspect pension transfers face veto

● New rules allowing pension providers and scheme trustees to veto suspect transfers came into effect on 30 November. The rules are designed to combat scams that have seen thousands of savers encouraged to give up guaranteed pension-scheme benefits in favour of less attractive schemes elsewhere, simply so that the adviser can secure a commission. In some cases, such transfers have proved to be outright frauds. Under the new rules, where pensionscheme providers have serious concerns about a member’s transfer request, they will be legally entitled to refuse to carry it out.

● Tax relief on private-pension contributions cost the Treasury a record £42.7bn in the 2020-2021 tax year, new data reveals. While income-tax receipts on pensions in payments raised almost £20bn, the net cost of private pensions to the taxpayer was still £22.9bn. The figures provide ammunition for supporters of reform of pensions-tax breaks, potentially with less generous reliefs for high earners. But the data reveals that much of the relief goes to employers, for whom changes could be expensive and complex.

● The value of tax repayments made by HM Revenue & Customs to savers overcharged on pension withdrawals has reached £800m. The problem affects thousands of savers as they exploit the pension-freedom reforms to draw down money directly from their pension fund. With no limit on such withdrawals, many savers draw down large sums at retirement. But HMRC currently has no system for establishing whether these withdrawals are a one-off exercise or will be repeated, so it taxes them as the latter. Savers then have to claim back excess tax. Pension advisers suggest making one small withdrawal initially to get round the problem.