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2015 Pension Rules

2015 Pension Rules

From 6th April 2015 new pension rules came into force - will you be buying that car of your dreams, a second home or perhaps a place in the sun? 

The new pension rules offer flexibility and choice regarding your pension pot. With the new flexi-access drawdown rules, there are no income limits on the amount you can draw. 

If you are aged 55 or over with a private pension, you will most likely be eligible to make your own decisions on how much to withdraw, when to withdraw and how to invest the remainder. 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 cash in a relatively tax-efficient fashion.

Note that whilst the first 25% can usually be withdrawn tax free, anything further may be subject to income tax.

But beware - the more you withdraw in the early years, the less you will have available to provide income in the future, meaning there is more potential for you outliving your pension and running out of funds.

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

“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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