The rules on how you can access your pension savings from age 55 have changed. From age 55, you can access as much of your savings from your defined contribution pension scheme (also known as money purchase schemes/personal pensions) as you want under new ‘pensions flexibility’ rules. However, schemes don’t have to offer these options. The good news is that you may be able to transfer your pension to a pension provider that offers the option that you want to use.
You can access your pension benefits in a number of different ways:
You can take money direct from your pension pot without having to buy an annuity. You can put funds into income drawdown. There are no limits on how much or how little you can take from your pension fund each year. You can take a tax free pension commencement lump sum of up to 25% of your pension pot however drawdown payments are taxed as income
You can use some or all of your funds to buy an annuity that will be payable at least for the rest of your life.
You can transfer your pension to an overseas pension scheme (QROPS). Changes made to the legislation covering pensions savings in overseas schemes bring them in line with the 2015 changes made to the rules for UK registered pension schemes, but still retain some benefits over and above UK schemes.
If you are already retired or planning your retirement its essential that you review your options whether you opt for an annuity, a SIPP, a QROPS but ensure you take advice from a UK regulated company as the most suitable advice for you at this time could be do nothing.
If you have a Defined Benefit pension scheme (Final salary/company pension) there may be an opportunity to transfer to a flexible pension scheme should it be the most suitable option for your situation.
The UK State Pension is also changing, if you are not old enough to receive this find out how much you are going to receive, don’t leave it until you retire and then find out it’s insufficient to live on.
Next Month: Reviewing your investments inside your pension.
To review your retirement planning
and/or Investments, please contact me
on 647 681 974 or