Pension Simplification

• Early retirement age available from age 55
• Full concurrency (i.e. being able to pay into any array of plans you wish), subject to the Annual Allowance and potential for carry forward
• Wide investment flexibility
• Up to 25% tax-free cash
• The ability to commute ‘small’ funds as a one-off lump sum as opposed to having to draw a regular income from age 55 (subject to part of the fund being taxed)
• Flexible options at retirement when deciding to take benefits such as Flexi-access Drawdown
• No need to ‘have to’ secure benefits at age 75 via an annuity

In addition, pension freedom gives individuals further and greater flexibility to access their pension savings from age 55.

• To increase the flexibility of the drawdown rules by removing the maximum ‘cap’ on withdrawal and minimum income requirements for all new drawdown funds from 6 April 2015
• To enable those with ‘capped’ drawdown to convert to a new Flexi-access Drawdown fund once arranged with their scheme
• To enable pension schemes to make payments directly from pension savings with 25% taken tax-free, known as the Uncrystallised Fund Pension Lump Sum (UFPLS) option
• To remove restrictions on lifetime annuity payments
• To ensure that individuals do not exploit the new system to gain unintended tax advantages by introducing a reduced Annual Allowance of £10,000 for money purchase savings where the individual has flexibly accessed their savings
• To increase the maximum value and scope of trivial commutation lump sum death benefits.