24th February 2015 at 10:52am
5 essential facts about the pension changes
1. April 6 2015
Pensions change and effectively become tax-efficient savings.
2. 55 years of age
From April, you’ll have more choice about how to take money out of your pension pot when you reach 55 – if you want to.
3. 25% tax free cash
You can take 25% of your pension pot as free cash. The rest is taxable with the top rate of tax at 45%.
4. It’s your pension, your choice
You can choose:
A flexible income
Your pension stays invested and you are in control of stopping, starting and changing what you take out. If you take out a flexible income, you can move to a fixed income later.
A fixed income
An annuity gives a guaranteed life income but you can’t change your mind.
5. Death tax on pension scrapped or cut
If you take out a flexible income and die before the age of 75, your remaining pension savings are passed on tax-free to your beneficiaries. If you die on or after the age of 75, your beneficiaries pay income tax at their own rate, from 0-45%.