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Press comment: Pension freedoms users reclaim £38m in overpaid tax in Q3 bringing total to £372m since 2015

31/10/2018

If you are covering the latest pension flexibility statistics contained in the Pension schemes newsletter 104, which reveal that in Q3 2018 over £38m has been repaid due to HMRC over-taxation, bringing the total amount overtaxed since pension freedoms to £372m, please see the following comment from Ian Browne, pensions expert at Quilter.

Ian BrowneIan says:

“According to HMRC a further £38m has been clawed back from pensioners in the third quarter, which now makes the total that has been overpaid in tax since 6 April 2015 an eye-watering £372m with over 160,000 being forced to reclaim.

This is the largest amount repaid for any quarter since freedoms were introduced and these staggering figures continue to make a mockery of pension freedoms as it shows HMRC are simply unable to cope with the new measures even though they have been in place for over three years. And remember, these figures only acknowledge those who have filled out official tax reclaim forms.

“It is astonishing that HMRC have failed to address the problem and are still forcing people to fill out time consuming paper work to simply get their money back. This antiquated system is begging to be modernised to account for this new retirement landscape.

“The reason this problem occurs is that when someone first takes out their flexible withdrawal from their pension HMRC calculates this withdrawal using an emergency tax code which causes there to be an excessive tax reduction which ultimately has to be reclaimed.”

 

 

Pension Flexibility Stats

       
             

Period

Newsletter

Total Value Repaid

P55

P53Z

P50Z

Total Forms

6 April 2015 to 30 June 2015

74

9,727,296

1,666

1,542

197

3,405

1 July 2015 to 30 Sept 2015

74

34,175,132

4,016

7,320

1,394

12,730

1 Oct 2015 to 31 Dec 2015

75

24,135,645

3,528

5,816

1,629

10,973

1 Jan 2016 to 31 March 2016

78

24,808,722

3,535

5,635

1,120

10,290

1 April 2016 to 30 June 2016

80

30,261,528

5,938

5,194

1,503

12,635

1 July 2016 to 30 Sept 2016

82

29,652,033

4,910

5,558

1,514

11,982

1 Oct 2016 to 31 Dec 2016

84

22,891,268

3,654

4,269

1,161

9,084

1 Jan 2017 to 31 March 2017

86

22,810,697

4,102

4,113

795

9,010

1 April 2017 to 30 June 2017

89

26,835,357

6,070

3,408

1,098

10,576

1 July 2017 to 30 Sept 2017

92

36,875,395

8,489

5,944

1,735

16,168

1 Oct 2017 to 31 Dec 2017

95

20,562,071

5,310

3,597

1,024

9,931

1 Jan 2018 to 31 March 2018

98

22,514,839

6,218

3,448

988

10,654

1 April 2018 to 30 June 2018

101

28,997,768

9,558

3,614

1,305

14,477

1 July 2018 to 30 Sept 2018

104

38,252,931

10,580

5,604

2,169

18,353

Grand Totals

 

372,500,682

77,574

65,062

17,632

160,268

 

For more information contact

Alex Berry023 8072 626007741 151931alex.berry@quilter.com

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.1 billion in customer investments (as at 30 September 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• The private client advisers business is now Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.