There were a couple of points from the budget that will help savers, which we’d like to bring to your attention .
From 2016/17, it is proposed that access to the new flexibility of pensions will be extended to annuitants by allowing savers to sell their annuities – if their provider allows them to.
The lump sum received can be held within the personal pension environment for flexible access, used to buy a flexible annuity or taken as a taxable lump sum.
Consultation is already underway on the fine detail of these proposals. It remains to be seen whether this freedom will be extended to those already locked into a DB pension income that doesn’t best meet their needs.
Also from 2016/17, the pension lifetime allowance (LTA) will be cut to £1M from the current £1.25M.
It’s proposed that this allowance will be indexed in line with inflation from 2018/19, to help maintain its real value going forward. Government estimate this will affect around 4% of pension savers.
A new transitional protection option will be introduced to allow savers already above the reduced £1M LTA to lock into a higher allowance. There are no plans to revisit the pension annual allowance.
Making the most of your savings
If you wish to discuss how you can benefit from the pension changes that are available from April 6th 2015, contact us on 01825 76 33 66 or use the form on the contact page to book a consultation.