Pension Reforms in 2015. What The Government Isn’t Telling You

Pension Reforms in 2015. What The Government Isn’t Telling You

Pension Reforms in 2015. What The Government Isn’t Telling You

PENSION NEWS: After the financial fireworks settled following an announcement of new pension rules, the government promised access to free and impartial advice for all pensioners from the citizens advice bureau. That promise is now looking woefully inadequate.

The new rules allow you to withdraw up to 100% of your pension upon retirement, instead of being forced to purchase an annuity. From there, you could then access a diverse range of investment options. At least that’s how it was meant to work.

In reality the regime means that 650,000 people on the cusp of retirement seek to withdraw their pensions over the next 5 years, many unaware that they’re about to be collectively landed with a whopping £4 billion tax bill. The government has crowed repeatedly about the tax free 25% of the pension pot

They’ve been rather less keen to talk about the remaining 75% available, which would be taxed as severely as normal pension income. As Dan Hyde, a financial columnist at the Telegraph put it, ‘The Tories have prepared the ground for a tax grab with the pension freedoms in the Budget.’

This isn’t just bluster and fear. Here are the facts:

Pension Reform – What you need to know:

– From 2011 to 2014, the lifetime maximum pensions allowance has been cut by almost a third, from £1.8 to £1.25 million.

– The possible tax free contributions each year have gone from over £250,000 to just £40,000, excluding Carry Forward.

– After the tax free 25%, any lump sum withdrawals will be taxed like income at marginal rates. Withdrawals of over £41,866 (assuming no other taxable income) will see that money taxed at 40%.

– Pension tax breaks are likely to be cut after the next general election, regardless of who is elected. It’s a quick fix to increase tax revenue, but could severely damage your pension and savings

– The private pension age will rise to 57 in 2028 and after that be linked at 10 years below the state pension age.

– Are you aged 40 or below now? If you’re on a state pension, you won’t be able collect it until you’re 68.

Are you concerned that you might not receive the necessary advice to ensure a prosperous future for you and your family? Are you aware of the taxes, exit charges and other costs currently fencing in your pension? Are you worried that the government scheme might not give you all the answers you need? Don’t worry.

The Landscape is Changing

We are well aware that UK pension’s landscape is changing and we’re here to help you turn these formidable changes into a remarkable opportunity. Click here and enter your number on the top right hand side and we’ll give you a ring to discuss how to get your money working better for you. Alternatively, feel free to call us on 0207 562 5767, or come and visit us at 51 Moorgate.

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