The Financial Group
We simplify all those essential financial decisions
Pensions Simplification ‘A’ Day (Appointed day) arrived on 6th April 2006 and brought with it sweeping and radical changes for all pension plans – whether occupational or personal. Over recent years the rules & limits have changed. For example, from 6 April 2011 the individual Annual Allowance reduced to £50,000 and on 6 April 2012 the individual Lifetime Allowance reduced from £1.8 million to £1.5 million. All individuals are able to fund up to these limits, although tax relief will be restricted for high earners. (Schemes already in existence before 6 th April 2006 needed to update their rules to allow some of the new flexibilities.) Exceeding these limits will simply trigger a tax charge. The ‘A’ Day rules made the majority of pensions much simpler and there were a number of key advantages to the changes including the fact that Pensions are now much easier to understand & most people will now have greater flexibility in the size and timing of their contributions. There were also a number of other changes including:- Early retirement age rose from age 50 to age 55 on 6th April 2010 Full concurrency (i.e. being able to pay into any array of plans you wish), subject to the annual allowance Wider investment flexibility Up to 25% Tax Free Cash (Pension Commencement Lump Sum) is available from the majority of pension schemes. The ability to commute a ‘small’ fund as a one off lump sum as opposed to having to draw a regular income – now set at a fund of £18,000 or less. Flexible options at retirement when deciding to take benefits Why not contact us to review your retirement planning?
Pensions Simplification