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2015 Pension Rules

2015 Pension Rules

From 6th April 2015 the new pension changes came into force - will you be buying that car of your dreams, a second home, a place in the sun? The new pension rules offer flexibility and choice regarding your pension pot. With the new flexible flexi-access drawdown rules, there are no income limits on the amount you can access. You can withdraw as much cash as you need, when you need it... subject to income tax. But beware: the more you withdraw in the early years, the less you will have available to use to provide income in the future, meaning there is more danger of you running out of money. So you may wish to continue to choose where your pension is invested so that your fund, and the income you take, will rise and fall with the market.

Top tips

  • Be aware of the income tax consequences of taking your pension fund
  • Look at the total effect on your estate, inheritance tax and family provision
  • Consider your future income needs
  • Make sure you take only what you need 

How do you qualify for flexible flexi-access drawdown under the new pension rules?

From April 2015, the rules changed. Most people over the age of 55 with a private pension will now be eligible for flexible flexi-access drawdown and will make their own decisions on how much to withdraw and where to invest.

The changes mean that, instead of buying an annuity with the pension pot that you saved for throughout your working life, you are able to withdraw it in a relatively tax-efficient fashion.

Under the new rules, pensioners can take all of their money out as cash at any point from the age of 55 (subject to their marginal tax rates on all but the first 25%) or they can choose to withdraw it in instalments. Funds can be left in the pension pot and continue to be invested – although remaining subject to your attitude to risk.

“This government believes in the principle of freedom.  Individuals who have worked hard and saved responsibly throughout their adult life should be trusted to make their own decisions with their pension savings” – George Osborne, Chancellor of the Exchequer 2015


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