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      12-28-2012, 06:52 AM   #39
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Originally Posted by fulcrum View Post
Telegraph 22 December - Under the new tax free limits which were announced in the Autumn Statement, workers with a gold plated final salary pension scheme can get an inflation-linked income of up to 62.500 a year before they have to pay tax, while a saver on a defined contribution pension scheme could get a pension of just 35k before tax.

Just slightly disingenuous. 'Before they have to pay tax' actually means that they pay standard income tax up to an including 40% HRT on pension income, but if they exceed 62,500 pension income there is an additional 20% on income and 55% on the tax free pension lump sum. So the Telegraph is very misleading.

The comparison with a DC 35K pension is probably for an annuity for a 55 year old male and these can come in all sorts of varieties - so again probably misleading. I do agree though that the Final Salary schemes are the gold standard which is why they are being completely phased out as they are unaffordable in the private and public sectors.