Pension Freedom

The pension landscape has changed. In April 2015, the government overhauled the pension system for the better by making some dramatic changes. Let’s explore what these main changes and how they will impact clients.

More financial freedom for everyone with a pension. Greater flexibility in the pension rules means more choices for pension savers in particular those with defined contribution pensions.

The changes include::

Flexible access to pensions from 55

Flexible access to pensions from 55

No limits on drawdown from a pension.

No limits on drawdown from a pension.

Savers can withdraw as they see fit

Savers can withdraw as they see fit

£10,000 Limit on contributions if savers withdraw

£10,000 Limit on contributions if savers withdraw

Three ways to take money out:

Take the whole amount With 25% tax-free and the rest taxed as income.

Take 25% tax-free lump sum and draw the rest as an income, taxed at marginal rate.

Take no lump sum, but a regular income with 25% tax-free and the rest taxed at
marginal rates.

If a saver dies before reaching 75, they can pass on their pension tax-free

If a saver dies after reaching 75, beneficiaries pay tax on a lump sum or income.