The new pensions landscape gives you more control over what you take out, and when. But there are traps for the unwary here and you could sleepwalk into more than one tax bill if you get it wrong.
Professional advice can help you make the right decisions for you and your loved ones. So why not invest some of your time now to make sure you’re on track to get the best from the new rules?
- What’s changing?
- From April, anyone with a flexible pension can: ¬
- Keep their pension pot invested and dip directly into it when needed from age 55 – this flexible income is known as ‘drawdown’. This means you can choose what, when and how much to take out of your pension – there won’t be any limit on how much you can take out ¬
- Pass any remaining pension savings onto their loved ones on death, potentially tax free and the existing options will still be available: ¬
- You can choose to take tax-free cash (normally up to 25% of your pot) ¬
- Your pension pot, or part of it, can still be used to buy a guaranteed income (called an annuity)
- What this means
The new pension rules give you much more freedom over how you can get access to your pension savings. This makes it all the more attractive to build savings in a pension in the first place. You have more choice. More control. And more scope for making tax-efficient decisions.
Justin King Chartered Financial Planner