Back
Pension changes will hit women hardest
24 August 2010
Some of the proposed changes to pensions set out in the emergency Budget will have a negative impact on women, according to RBC Wealth Management. RBC, the international division of the Royal Bank of Canada, said changing the annual allowance from £225,000 to a proposed £40,000 would have a disproportionate impact on women. Dion Lindskog, head of life and pensions products at RBC said many women did not earn an income or pay into a pension during the years they were having or raising children and so would suffer from not being able to carry any unused pension allocation forward. He said: "Prior to pensions simplification in 2006 there was a provision for carry back and carry forward. "There needs to be some sort of catching up process because people will not always have the ability to pay in at the right time. "A more rigid structure will impact people whose income pattern tends to be different." Mr Lindskog said many people were not aware if one spouse was working and the other was not, the working spouse could pay up to £3,600 a year into a pension for the non-worker. He said: "There is a positive side to the proposed changes because if people get the right advice more husbands would make provision for a pension for their wife if she has stopped work. "If people start planning properly the changes could actually help." Published by FTAdviser
