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Under the new regime, everyone aged 55 and over with savings in a defined contribution plan will be allowed flexible access to some or all of their pension savings. The option of taking a tax free lump sum of 25% of the pension fund will remain; to help people understand their additional retirement options, free and impartial guidance will be available. This will be provided by an independent organisation, such as the Money Advice Service or The Pensions Advisory Service. The guidance will not include advice or any specific recommendations and will not take account of people’s personal circumstances.Mark Pearson, Director, Business Development at Origen Financial Services comments: “We provided a detailed consultation response to the Treasury and I am delighted to see that a large number of our recommendations have been taken forward. Therefore we welcome these changes and will be fully integrating them into the day to day award winning advice we deliver to our clients.”
The changes being introduced include a reduced annual allowance for future tax-relieved contributions of £10,000 per annum (currently £40,000), where people wish to continue paying into their pension while drawing down benefits. This is to prevent abuse of this new flexibility. In addition members who have not yet taken their final salary pension will be able to benefit from the new flexibility by transferring into a defined contribution arrangement. As a safeguard, anyone undertaking such a transfer must be able to prove they have taken advice from a financial adviser. Those members with smaller defined benefit pensions can access their funds as a lump sum from age 55.
Tax rules are to be loosened to help the annuity industry innovate in order to help people get decent quality guaranteed income products. There are also plans to reduce the death benefit charge, which currently stands at 55%. Further details of this will be published in the Autumn Statement later this year. It will be possible for payments from guaranteed annuities to be paid directly to beneficiaries as a lump sum, provided the annuity is worth less than £30,000. In addition, the minimum age for accessing a private pension is moving from 55 to 57 in 2028 and will remain linked at 10 years below state pension age.
Origen stresses that the changes to legislation, Her Majesty's Revenue & Customs practice and tax laws required to bring in this new pension flexibility have not yet been made and the current proposals are open to interpretation. Anyone wishing to find out more should seek professional advice and not take any action on the basis of this news release.
Origen Financial Services
Origen Financial Services is one of the UK’s leading financial advisers. As an advice-led business it focuses on building strong partnerships with clients. Origen provides financial advice to private clients, small to medium sized businesses and employees of some of the UK’s largest organisations. Origen Financial Services is part of the Aegon Group.
Origen Financial Services Limited is authorised and regulated by the Financial Conduct Authority. Our Registration Number is 192666. Our Registered Office is: Infor House, 1 Lakeside Road, Farnborough, Hampshire GU14 6XP. Tel: 0844 209 3000, Fax: 0844 209 3001.
Contact Info:
Name: Richard Jones Head of Marketing
Email: Send Email
Organization: Origen Financial Services
Phone: 0844 209 3646
Website: http://www.origenfs.co.uk/
Release ID: 59085
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