The demand for long-term financial advice is on the rise following a radical transformation on how savers access their pension.
A summary of changes:
Those who are 60 or above and have a pension policy that has a value of £10,000 or less, can take all of the money in that policy as a lump sum. This can be done for up to three pension policies if they each have a value of less than £10,000.
- People between age 60 and 75 who have a pension policy larger than £10,000 can still take it as a lump sum, if the value of all the pension funds added together is below £30,000. In both examples, one quarter of the amount will be paid tax free, and the rest will be taxed at a marginal rate of income tax.
- Savers who use ‘income drawdown’ will be allowed to take larger sums as income. An individual will need just £12,000 of secured pension income from other sources to make unlimited withdrawals through ‘flexible drawdown’.
From next April pension savers will be able to access their entire pension pot from age 55. They can also take control of how and when they use the income option from their pension savings.
- Those over the age of 55 will be able to obtain the entire pension pot with 25 per cent tax free. The remainder will be subject to a marginal income tax rate (the current rate for full withdrawals is 55 per cent).
Expert advice on how to generate the desired income from a mix of pensions, ISAs, property and other assets is now essential.
With a specialist financial services manager on the team, WHN is ideally positioned to help clients navigate the pension rules as they take effect
For further information, contact Brian Ollerton on 01706 213356 or email brian.ollerton@whnsolicitors.co.uk
