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Pension cash can boost the economy.

CONSUMERS should be allowed to tap into their pensions before they retire, an MP has declared.

Liberal Democrat shadow work and pensions secretary Steve Webb said people should be able to draw tax-free lump sums from their pensions to help them clear mortgage arrears or make a large purchase, such as a car.

He said the move could help stimulate the economy and rescue the housing market at very little cost to the taxpayer. In a report for the thinktank CentreForum, he said people should be able to withdraw any lump sum they had built up - to a limit of pounds 10,000.

He added that pension schemes could charge a fee for the withdrawals, and limit them to one per member per year.

Mr Webb said that as four-fifths of people already take a tax-free lump sum when they retire, giving them early access to the money wouldn't have a major effect on pension income.
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Publication:Daily Record (Glasgow, Scotland)
Date:Jul 9, 2009
Words:156
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