We simplify all those essential financial decisions
Pensions Simplification‘A’Day(Appointedday)arrivedon6thApril2006andbroughtwithitsweepingandradicalchangesforallpensionplans – whether occupational or personal. Overrecentyearstherules&limitshavechanged.Forexample,from6April2011theindividualAnnualAllowance reduced to £50,000 and on 6 April 2012 the individual Lifetime Allowance reduced from £1.8 million to £1.5 million.Allindividualsareabletofunduptotheselimits,althoughtaxreliefwillberestrictedforhighearners.(Schemes alreadyinexistencebefore6thApril2006neededtoupdatetheirrulestoallowsomeofthenewflexibilities.)Exceeding these limits will simply trigger a tax charge. The‘A’Dayrulesmadethemajorityofpensionsmuchsimplerandtherewereanumberofkeyadvantagestothe 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 benefitsWhy not contact us to review your retirement planning?