Still lots of questions on 'rushed through' LTA abolition

The divisional director of retirement and holistic planning at St James's Place says the industry is still waiting on updated legislation after the latest set of corrective legislation, which came out in the middle of March.

"There still needs to be more [done] to fix other things that weren't corrected in that," she says.

This means that while advisers who have clients with "simple lives" – those who have not yet taken any benefits – can advise them on their retirement income with relative confidence, advisers with anything beyond that would struggle.

And it is difficult to help them, she adds, as there are still so many unanswered questions, and at times the legislation feels like it is not working as intended.

The pensions LTA has been abolished as of April 6 this year, but this does not mean there are no limits to the amount people can take from their pensions tax free.

There are still two standard limits – the lump sum allowance and the lump sum and death benefit allowance – and one for overseas.

There are still question marks around the calculations for those with protected tax-free cash and the knock-on effects this creates for testing against the lump sum allowance.

There are also issues around death benefits, she says, adding: "And I'm pretty sure there are other things that we've not come across."

This means in some cases providers cannot pay out the benefits for fear of retrospective tax charges.

"For me, there's been such a rush to get this through, it's not just the gaps in legislation, it's the gaps in education and the gaps in guidance.

"So there may be perfectly legitimate and perfectly correct legislation there, but it's not flowed through to the places where advisers go to get their help."

To hear more about the persistent issues and how advisers can work around them, click on the image above.

carmen.reichman@ft.com