You may have heard about pension freedoms, but if not then below are a few questions which may help.
What is it?
In April 2015 major changes were introduced giving people over the age of 55 greater control of their pension savings – meaning they could decide how they wanted to access their pension pot. When it comes to planning for your long term future there are more options now available.
Will the change affect me?
If you are over the age of 55 with a defined contribution pension, meaning a workplace pension, personal pension or self-invested personal pension (SIPP), then you will be able to access your savings as you see fit.
How much can I withdraw?
You can withdraw as much as you like with the first 25% tax free, any amount above your initial 25% tax free cash sum entitlement would be taxable at your marginal income tax rate as earned income (i.e. before savings or investment income).
Can I leave my pension pot to loved ones?
Yes, if some or all of your money remains invested in a pension fund, then you can pass it on to your loved ones when you die. This would be tax-free should you die before you reach age 75 but taxable after that.
It’s important that you make the right choices when planning for your retirement which is why Pensionlite are proud that our highly experienced team of advisers are on hand to answer any questions you have. If you want to discuss further about pension freedoms and find out if it affects you, then contact the Pensionlite team today.