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UK Pension reform April 2015

How do the changes in UK Pensions Legislation affect me?

The new legislation that comes into effect from April Protected content herald the most significant changes ever to the way we can utilise our retirement funds. Old, restrictive practices are to be swept away and replaced with a new consumer freedom that allows you to control how much and when you access your accrued pension fund(s).

If you have a UK pension:
1. You will have the ability to take benefits from age 55 onwards
2. You will be able to encash all or part of your pension pot
3. You can take up to 25% of the fund value as a pension commencement lump sum
4. The remaining fund can be used to provide income but withdrawals are subject to your marginal rate of Income Tax (i.e. 20% 40 or maybe 45%)
5. You do not have to purchase an annuity
6. You can fix an income to suit your personal circumstances
7. You can change the level of income at any time
8. Depending on your age at death the remaining fund could be passed on to beneficiaries free of Inheritance Tax

In addition if you have a QROPS:
Depending on the location of your QROPs:
1. You will be able to encash all or part of your fund
2. There will be no UK inheritance tax to pay on your remaining pension fund
3. You have the ability to fix your own level of income and to adjust the level at anytime
4. You can avoid local succession laws
5. You can invest in multiple currencies to reduce exposure to fluctuating exchange rates

Do you have any views on this?

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