Yesterday, the Government confirmed that the radical changes to pensions, first announced in the Chancellor’s March Budget, have now been approved. The new rules aim to help you make the most of your retirement saving by providing more flexibility and reducing restrictions.
The changes could affect every pension investor, in particular those of you who:
Are 55 or over in April 2015; and
- Have a Defined Contribution pension or Self Invested Personal Pension; and
- Are in income drawdown before 6th April 2015; or
- Are in flexible drawdown before April 2015; and/or
- Have additional Voluntary Contribution schemes worth more than £10,000
What are the changes?
The Government announced seven key changes:
1. Flexible access to pensions from age 55
2. Pensions income (drawdown) restrictions to be abolished
3. New restrictions on how much you can contribute
4. Free access to impartial guidance
5. Opening up Defined Benefit pension withdrawals
6. Increase to retirement age
7. Possible future reduction in tax if you pass on your pension to beneficiaries
You can read more about these important changes and how they affect your pension in our new ‘Impact of New Pension Changes – July 2014’ guide.
Alternatively, if you would like to talk about your pension or how these changes will affect your financial situation, please speak with your adviser. If you do not have an adviser, you can find a True Potential Partner here.
Please be aware that this is based upon True Potential Investments’ interpretation of the HM Treasury response to the consultation “Freedom and Choice in Pensions” and other supporting documentation as of 21st July 2014. As Government produces further details then it is possible that our understanding may change. Tax treatment can change and is relevant to your personal circumstances. Please remember that like any investment, capital is at risk and investments can go down as well as up so you may get back less than you invested all of which could impact your standards of living in retirement. This should not be construed as financial advice.