Pensions Freedoms & Flexibility

What does Pensions Freedoms & Flexibility Mean?

April 2015 saw the introduction of some of the most radical changes to pensions that this country has seen in almost 100 years. In short, those aged over 55 have been given the freedom to access their pension pots flexibly and efficiently.

What’s Different?

Where one would have traditionally chosen to buy an annuity, more options are now realistically available as a result of changes made by Chancellor George Osborne. As of the beginning of the 2015 tax year, it became possible to access one’s pension pot flexibly thanks to Flexible Access Drawdown.

Whilst annuities remain an option, they have now become one of a few options. It’s important to note that the Chancellor’s changes have created a more complex landscape for those planning for retirement and as such seeking specialist advice is now more important than ever.

Tax Efficient Retirement Planning

Tax efficient planning is key to ensuring you take greatest advantage of your pension pot. Flexible access drawdown generally allows you to draw 25% of your pension pot tax free, and the remainder being subject to income tax at your current rate.

With freedom comes responsibility. The choices now available to people create new opportunities, but also bring with them greater risks and greater opportunity to make costly mistakes – another reason why specialist advice is not only recommended, but essential.

If you want to discuss your particular situation please contact Reeves Financial on 01403 333145 or email areeves@reevesfinancial.co.uk

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
The tax treatment is dependent on individual circumstances and may be subject to change in future.