The Government's proposals were set out in two main consultation documents “Simplifying the taxation of pensions: increasing choice and flexibility for all” (December 2002) and “Simplifying the taxation of pensions: the Government's proposals” (December 2003). Summaries of the responses to the two consultations were published on 14 July 2003 and 25 November 2004 on the HMRC website. The proposals were also extensively discussed at a series of public consultation meetings and individual seminars and meetings with the pensions industry.
On 9 August 2004 draft Regulations, provided for under powers contained in the Finance Act 2004, were published for consultation and a document summarising the consultation responses was published on 8 March 2005. Most of the remaining regulations were published in draft but were not consulted on.
Figures are not available, but the numbers of individuals who have entered into alternatively secured pensions (ASP) to date is likely to be small, as the ASP facility only became available on 6 April 2006 and generally only members who have reached age 75 since that date may use ASP.
In addition, pension schemes that are unable to trace a member when they reach age 75 hold their pension scheme assets as an ASP fund. Only a relatively small number of individuals are likely to be in this position.
The new simplified tax regime for pension saving, which began on 6 April 2006, was originally enacted in Finance Act 2004.
Changes to the new regime were enacted under sections 101-102 and schedule 10 of the Finance Act 2005. Many of these changes provided additional flexibilities for schemes and individuals and clarified aspects of the new rules to smooth the transition from the previous to the new simplified regime. There were other changes, for example to provide for the pension protection fund to receive the same types of tax reliefs as registered pension schemes.
Changes were also made under sections 158-161 and schedules 21-23 of the Finance Act 2006, which provided additional flexibilities for pension schemes, providers and members and also dealt with other matters, for example imposing certain tax charges on some types of registered pension scheme which hold residential property or other taxable assets as investments.