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Transfers in drawdown allowed for under age 55s
HMRC have announced that transfers in drawdown for customers under the age of 55 are allowed. Customers who are under age 55 are now free to transfer their drawdown funds between providers and continue to take any income they need, without being subject to tax charges.
They have also announced that transfers of an existing lifetime annuity, short-term annuity or scheme pension are allowed.
The change will be in regulations to be issued as soon as possible and will be backdated to 6 April 2010.
Here’s the announcement from HMRC.
Buying a lifetime annuity, scheme pension or short-term annuity
Drawdown customers under the age of 55 cannot buy a lifetime annuity, short-term annuity or scheme pension. HMRC have not announced any relaxation to this rule. Any payments from a lifetime annuity, short-term annuity or scheme pension purchased from 6 April 2010 for a customer who is under age 55 are unauthorised payments. Customers still have to be age 55 to purchase an annuity from drawdown funds unless they are in ill-health or serious ill-health or have a protected low pension age.
Published 5 July 2010
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