• Cap on capped drawdown raised from 120% to 150% of GAD (government Actuary’s Department)
•
Size of lump sum small pension pot increased from £2,000 to £10,000
• Overall size of pension savings that can be commuted to a lump sum by someone aged over 60 increased from £18,000 to £30,000
From April 2015 •
25% limit for tax free cash sum from a pension remains but balance now to be taxed at marginal rate of income tax (rather than 55%)
• Overall eff ect of measures above is to remove the need to arrange an annuity
• A consultation on how best to achieve the changes scheduled for April 2015 has been announced
What is a Drawdown Account? A drawdown allows you to take income (if you want an income) from your pension pot while the residual value remains invested. You can choose how much income you want to be paid each year within certain limits. There are two forms of drawdown pension:
1. capped drawdown 2. fl exible drawdown
Capped drawdown pension With a capped drawdown there’s a maximum amount you can draw each year but no minimum amount. calculated by
these reviews pension payment amounts can go down as well as up. The changes in amount can be signifi cant depending on the circumstances when the review was made.
Flexible drawdown pension To qualify for fl exible drawdown you must already be getting a pension income of at least £12,000 each year from ‘secure pensions’ such as the State Pension, most lifetime annuities and pensions paid from fi nal salary schemes. With fl exible drawdown there’s no limit on the amount you can draw from your pension scheme in any year. You can:
• • •
leave it all in the scheme
take the whole pension pot in one go take just part of it
Before 27 March 2014 you needed to be getting a secure pension of at least £20,000 each year to qualify for fl exible drawdown.
On death the remaining pot can actually be encashed by any benefi ciaries of your estate and this is subject to a tax charge of currently 55% but this is now under review. However, even with this tax charge, it could be a way to leave more of your lifetime savings to your family. This is an option which is NOT available under the current annuity legislation.
This annual limit is your scheme administrator
based on the value of your pot and factors set by the Government Actuary’s Department.
If you take more than this permitted limit in a year the excess will be subject to a tax charge as an unauthorized payment.
Like any investment, this drawdown must be reviewed on a regular basis. Because of
With such sweeping changes in this important area, again it is vital to receive unbiased and impartial advice at the time you need it most. Careful considerations needs to be taken so that as an individual, you make the correct fi nancial decision for you and your family.
Kindly provided by Darren at Clarity Wealth Services. t: 01786 845 599
Please mention thewire when responding to adverts 61
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101