Pension Changes

At Hart Greaves, we feel that there are 12 points to consider when reviewing your pension.


From April 2015 anyone over age 55 who has a defined contribution pension scheme can access their pension scheme as they see fit. All restrictions have been taken away.


Even so not all pension providers have to offer the full range of pension freedoms. You might have to move to another provider.


NHS, Civil Service fire fighters, police, armed forces cannot give up their guaranteed pension income under the reforms.


Most people can have 25% of their pension pot tax free.

Say you had a pension pot of £100,000 you could take £25,000 tax free. The balance could be taken but would be subject to income tax.


A major change is the taxation Pension Death Benefits.
From April 2015, if death occurs before age 75 your family can inherit your pension fund tax free.

If you die after age 75 withdrawals are taxable at income tax rates. Any lump sum payments will be taxed at 45% until April 2016. The Government have stated their intention to change this after 2016 to make it subject to a beneficiaries income tax rate but this remains to be confirmed.


Be careful if you consider moving pension providers in the hope of benefiting from these new freedoms. Some pensions may have bonuses or guarantees that may be lost on transfer.


You don’t have to stop working even after you access your pension.


You can pay up to £40,000 per annum into a pension (and get tax relief on the contributions) although this might be reduced if, for example your employer also puts money into a pension for you.


If you use the new ‘flexi-access drawdown’ to draw benefits from your pension you will then be restricted to only being allowed to pay £10,000 per annum into a pension (with tax relief).


Once you have drawn on a pension from provider a under the new rules you have to advise all other pension providers within 91 days of receiving confirmation from the pension provider or joining a new scheme if later.


The minimum age at which you can access your pension is also rising and will increase to age 57 in 2028 and after that it will be set at 10 years before State Pension Age.


The basic state pension is currently £113 per week with additional earnings related amounts on top. From April 2016 there will be a ‘single tier’ system of approximately £148 per week.

Please contact Ken Hart for a personalised review of your options.

This is Hart Greaves current understanding of the Government plans for pension reforms. Please do not act on this note.

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