On the 6th April 2015 changes were made to the way you can use your pension savings.
This is a summary of what the changes may mean to you. To help you more, we’ve provided a Jargon Buster at the end of this document.
This will increase from age 55 to age 57 in 2028.
You can now take ALL or PART of your pension fund as cash on or after your 55th birthday. You can still take 25% of your pension pot tax free.
With Flexi-access drawdown you can now TAKE as much money as you like, when you like. This replaces existing Capped Drawdown and Flexible Drawdown.
The 55% tax on death benefits for people aged 75 and under WILL BE COMPLETELY REMOVED, and reduced for those aged 75 and over at time of death.
This new option on some products means you won’t pay income tax on 25% of each withdrawal you make, paying tax on remainder at your marginal rate of tax.
Anyone in a defined contribution scheme nearing retirement will be able to access free and impartial guidance from the Pensions Advisory Service. You might like to visit their website.
You can now take a maximum of £10,000 (up from £2,000) from three (up from 2) smaller pension pots - a potential £30,000 lump sum.
If you’re aged 60 and over, you can take one lump sum. The first 25% is tax free and you only pay tax on remainder at your marginal rate of tax.
This has dropped to £12,000 from £20,000.
This has increased from 120% to 150% of the Government Actuary Department limit (GAD).