Pension lump sums

The changes to pensions announced in the Autumn Statement came into effect this month.  Among them are significant changes to the taxation of pension lump sums.  This is what they mean, in plain English!

• Then: Previously, you could only take one lump sum from your pension.  You were allowed to take 25% of your pension pot free of tax; the remaining 75% had to be put into a drawdown account and any money that you took out of this was taxed at your marginal rate. 
• Now: You can now withdraw a series of lump sums, instead of only one.  What’s more, you can enjoy the first 25% of each new lump sum tax free, without having to enter into a drawdown policy; the remaining 75% will be taxed at your marginal rate.  

The political spotlight on pensions

Pensions have been at the centre of political attention for a while.  The March 2014 Budget introduced measures to allow retirees to spend their pension pot as they choose, rather than having to buy an annuity while, six months later, it was announced people are to have the freedom to pass on their unused defined contribution pension to any nominated beneficiary when they die.

Pensions saving is now clearly a major focus for politicians – we can expect this to continue no matter who wins at the general election on 7 May.  This means the pensions landscape is likely to continue to change, so it’s more important than ever to get expert advice on your individual circumstances. 

FOR EXPERT PENSIONS ADVICE:

call Graham on 07740 192505 

or email gkinns@coreifa.co.uk 

to book a no-obligation consultation at our expense