Changes to the way people are able to access their pensions, known as pension freedoms, were introduced in April 2015 that meant a change in the pensions system, meaning that people now have more control than ever over how they are able to access their savings.
If you need advice about pensions freedoms, or assistance unlocking your pension, our expert pensions Advisers can help.
Understanding the new pension freedoms can be challenging, and knowing what the best option is for you may be causing you concern. However, our pensions experts will discuss all of your options with you clearly and concisely. We are completely independent and will always advise in your best interest, so you can be confident in your pension decisions.
Prosperity financial advisers in Glasgow are here to provide you with help and advice about all aspects of your pension. We can assist you in ensuring that all the decisions you make are right for you. We offer expert advice on a wide range of pension services, so contact us today to ensure your future is protected.
To discuss how you might utilise the new rules surrounding pensions, contact our expert team today by calling 0141 337 1346 or complete our online enquiry form and a member of our team will get back to you right away.
What do the pension freedoms mean for me?
In April 2015, the law changed to give people more control over how they take their pension. For example, you no longer need to purchase annuities with your pension, and can opt to take your pension from the age of 55. However, you will still need to make sensible decisions – after all, you want to live a comfortable life after you retire. Understanding your best options for utilising the new pension freedoms is important, but our team can help. Contact us today to discuss your circumstances.
What are the changes?
A number of changes were brought into place to ensure that more control was given people to people accessing their pensions.
Not buying annuity
The biggest change that was made was people being allowed access to their defined contribution pension however they want from the moment they retire. Pension schemes like these are dependent on how the investments you have put your savings into perform. This meant usually that people would buy annuity with their pension to guarantee an income until their death. The changes in the rules mean that now people are able to access all of their pensions when they turn 55 and are able to use them for whatever they choose.
Withdrawing your pension in one go
Buying annuity was traditionally the only way to change your pension savings into an income. While people are still able to buy annuity on their savings, this is no longer the only option.
For example, if your pension pot is £100,000, you are still able to take as much as £25,000 tax-free, but can also take advantage of the following options:
- Withdraw the remaining £75,000 in full, or in lump sums, paying income tax at marginal rates of 20%, 40% or 45%.
- Buy annuity with the remaining money
- Keep the remaining money invested, drawing whatever you want in income
- Buy annuity with some of the money and either withdrawing the rest of the money or keeping it invested
More flexibility on drawdown
Drawdown is route that, until the changes were brought in, was normally only taken by those that had a larger pension pot. The drawdown route allows you to keep your savings in the stock market, as well as withdrawing income when you want to.
The changes that were introduced meant that drawdown is a viable option for those with all sizes of pension pots. There is no longer a minimum income requirement, which means that you can take out as much from your savings as you want each year.
Contact Prosperity Financial Pension Freedoms Advisers Glasgow
If you need advice or assistance concerning pension freedom or unlocking your pension, or for anything else regarding pensions and other Financial matters, contact our expert team today. We aim to ensure that you are completely satisfied with our service, and will always offer additional advice and assistance. Call us now on 0141 337 1346 or complete our online enquiry form and a member of our team will get right back to you. We look forward to helping you plan your future.