5 facts about the pension changes

5 pension changes facts

Pensions

MoneyPlus Features Team

24th February 2015 at 10:52am

5_things_to_know_about_pensions

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%.

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