If you’re planning your retirement or want to retire early, new rules introduced in 2015 could benefit you hugely
The way people take money out of their pensions has changed over the last few years, as now there are new freedoms and options available to anyone over the age of 55.
Pension freedom tax rules allow members of defined contribution pension schemes to access their pension savings early, provided they have reached the required minimum pension age (currently 55).
Scheme members can take their pension benefits in a number of ways, such as one or more payments a year for a number of years, several payments a year over a shorter time frame, or the full value of the fund could be taken in one payment subject to income tax.
If you’re 55 or over and have a defined contribution (money purchase) pension plan, you could:
Leave your pension pot invested
Buy a guaranteed income for life (a lifetime annuity)
Take a flexible income from your pension pot (typically known as ‘flexi-access drawdown’)
Take a cash lump sum from your pension pot (up to 25% tax-free)
Combine one or more of the options above. You can take cash and/or income at different times to suit your needs
Making sure you manage your money well in retirement is important, as it can affect how long your pot lasts and the kind of lifestyle you will be able to afford.
The above was provided by Hartey Wealth Management Limited. www.harteywm.co.uk (Hartey Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority)