The introduction of Pension Freedoms in April 2015 led to greater flexibilities. However, some people think they are now too complicated and lead to more confusion, therefore feel they could benefit from independent financial advice.
Recent research conducted by some of the biggest pension providers found that more people are interested in the options now available due to Pension freedoms.
It also found that more people were planning for their retirement and saving more as a result.
The Pension Freedoms allow you to:
- Access 25% of your pension as a tax free lump sum from 55 onwards
- The remaining 75% can be withdrawn as cash but may be subject to tax – depending on your tax code and the size of the fund
- You can use your pension to buy an annuity or take as a flexible drawdown facility
- You can transfer workplace final salary schemes into personal pensions if beneficial
- You can leave your funds as an inheritance
- You must seek advice on funds above £30,000 that have a guarantee
- You may have to complete self-assessment tax forms in retirement
Despite the greater flexibility given by the Pension Freedoms, a lack of awareness of the above-mentioned facts means, sadly, not everyone on reaching retirement age benefits from the best options available.
It is believed, increasing interaction with independent financial advisors is key to taking full advantage of the flexibility offered by Pension Freedoms.
In summary, the Pension Freedoms are great. They offer you much greater flexibility than previously available. However, although there have been changes to pensions in the last two years and this can be confusing for some, they have increased the options available to you. This ultimately means you are much more likely to find a retirement option that is suited and tailored to your needs and circumstances. It is also important to note that you are not too young to be thinking about saving for your retirement within pensions.
To help you identify what that may be, we can support you. If you would be interested in discussing your pension with an independent financial adviser, or if you are close to retiring and would like to look at your options, please do not hesitate to contact us or call us on 01536 512724.