Women taking capped income from their pension could receive an income uplift next tax year of up to 33% due to the gender neutrality regulation coming into effect on 21 December, along with the formula used to calculate maximum capped income withdrawal levels will see a 20% uplift following the Chancellor’s autumn statement, according to Skandia.

The gender neutrality rules would mean for women that capped income withdrawal calculations will be based on male rather than female income factors, which will be higher. Also, following the Chancellor’s autumn statement, the formula used to calculate maximum capped income withdrawal levels will see a 20% uplift. No date for when this change will become effective has been announced yet, but it is widely expected that the government will want consumers to benefit sooner rather than later, so the start of the new tax year is a real possibility.

Skandia calculated a potential rise of 33% as an effect of these changes by comparing the maximum annual income for a woman aged 64 this year compared to next year, assuming the increased income factors detailed above apply from next tax year. The figures for next year are based on the gilt yield continuing at its current level of 2%.

Share Story: