26 March, 2015
The government are making a number of changes to the way you can access your pension from April 2015.
Anyone with a 'defined contribution' pension will have more choice and flexibility from the age of 55, with freedom to take your pension to suit your own circumstances.
Your options will include:
- Taking the whole pension as a cash lump sum. 25% of this will be tax-free and the remainder will will be taxed at your marginal rate of income tax.
- Take smaller cash amounts as and when you require. 25% of each withdrawal will be tax-free and the remainder taxed as above.
- Take 25% as a tax-free lump sum, and receive a regular taxable income from the remaining fund. This is known as income drawdown, and the remaining fund is still invested will the possibility of future growth.
- Take 25% as a tax-free lump sum, and use the remainder to buy an annuity. This will provide a secure income for the rest of your life.
Anyone who is 55 or over in April 2015 will be able to take advantage of these changes immediately. It is, however, important that you take advice on your options to ensure you are making the right choice.
For more information please contact Annette Heyes by email or on 01772 220022.