- HMRC says the 30-day cooling-off period does not apply to tax-free lump sums
- Pension providers contest HMRC update
HMRC has told pension providers and savers to stop using 30-day cooling-off period rules to return tax-free lump sums into pensions, following a wave of activity just before the Budget.
Amid fears that the cap on the 25 per cent tax-free lump sum could be cut from £268,275 to as low as £100,000, pension providers saw a spike in those taking their lump sums this autumn. After the cap was ultimately left unchanged, savers tried to put the lump sums back into their pensions using the 30-day cooling-off period normally available for pension products.