Due to this, seeking advice is essential, as the choice could have serious implications for retirement, Ms Hall said.
She added: “On the other hand, there could be issues for existing pensioners who may not be able to ‘afford’ to choose a higher pension, on the basis that they will need to repay any underpaid income tax during the statutory four year time limit (repayment plans needing to be factored into their cashflow planning) so discussions with tax advisers are essential, in order to avoid any nasty surprises.”
Parminder Gill, advice policy consultant at Wesleyan, said this consultation “is shaping up to be the biggest change to public sector pensions in the past five years”.
He said: “The proposed measures will have an impact on the retirement savings of millions – with potential implications for the size of their pensions pots and the amount of tax they will need to pay.
“The ‘right’ answer will very much depend on the individual, but almost everyone affected will have a complex decision to make factoring in projected pension benefits, planned retirement age, their life expectancy and any impact on their lifetime allowance or annual allowance of moving from one scheme to another.
“The process of resolving this will take some time, and the final proposal to members could look very different.
“However, an update on the government’s intended way forward will provide those affected with more clarity around what this will mean for them and enable them to start factoring it into their retirement plans.”
The consultation closed on October 11 and member’s will now have to wait to see what the government’s next steps will be.
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