UK. Quarter of over-55s unaware that pension savings can be taxed
One in four people approaching retirement in the UK are unaware that they have to pay tax on pension savings if they take more than 25% out as cash, a survey has found.
It was also found that one in five over-55s would be “shocked” if they were forced to pay tax on their pension savings.
Of those that believe they can get some or all of their pension pot tax-free, more than a third think they won’t pay any tax on a lump sum greater than the 25% threshold.
Emma Byron, managing director at Legal & General, which carried out the research, said the findings reinforce the need for savers to seek appropriate financial advice.
“Many customers don’t know about some of the fundamental factors that can impact how much money we have in retirement,” she continued. “Tax is one of these.
“The guidance and information people use needs to be clear and jargon-free, and we must engage customers more and encourage them to take financial advice.”
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