Life certainly doesn’t stand still in the world of pensions, we will see the next two years being the most active as regards Companies having to offer compulsory pensions to their employees where everyone who is eligible will be automatically enrolled into a scheme.
However the biggest pensions news in a generation is how the government are planning to allow far greater flexibility on how we take our pensions in the future, these changes are due to take effect from the 2015/16 tax year.
Here are some of the bigger points.
From April 2015
These are proposed changes and currently the government are in a consultation period to assess the effect of the changes.
From 55 whatever the size of a your pension pot, the government propose that you’ll be able to take it how you want, again the first 25% will be tax free but the remainder will be subject to your marginal rate of income tax in that year.
There will be more flexibility. People who continue to want the security of an annuity (Buying a pension income) will be able to purchase one and people who want greater control over their finances can draw down their pension as they see fit.
Although on the face of this it seems straight forward I would strongly suggest seeking advice from an independent financial adviser, as there are pit falls and you need to know how much you could get from a traditional annuity verses drawing down as you see fit. Drawing down as you see fit could mean your pension pot not lasting long at all or you could be greedy in the early years and end up paying higher rate tax! Your adviser will help ensure they meet your requirements.
For more information please feel free to call up with any questions on how the new rules could affect you.
Med Evans Darwin Wealth Management Ltd 01743 453934 or email using the link.
