The Year’s Hot Topic: Pensions.

As 2014 draws to a close, we take a look back at one of the hottest topics this year, Pensions.

The big news that from April 2015, people aged 55 and over will only pay their marginal rate of income tax on anything they withdraw from their defined contribution pension – either 0%, 20%, 40% or 45%.

The government has already increased the security of people’s retirement income by introducing automatic enrolment into workplace pensions. But the system is complicated and restricts people’s choices.

Meanwhile, the overall pension wealth you can take as a lump sum has increased from £18k to £30k.

These are revolutionary changes you could say, because it’s about getting more flexibility and choice about how pension benefits can be taken.

In fact, from April 2015, more than 320,000 people who retire each year with defined contribution pensions will have complete choice over how they access their pension.

And let’s face is, Pensions are very valuable and extremely important for everyone, so any reforms that are introduced to help improve products, providers and processes are a welcome change.

If you’re thinking that this is brilliant news and that you should take advantage of the opportunity to withdraw significant amounts from a pension, you should first consider how you will fund your retirement in the long term. After all none of us know how long or short our time will be. So, it’s worth carefully considering your options before doing anything.

And everyone will be in different circumstances. Plus, the rules could always change again in future.

Investing is not for everyone; if you are unsure please seek independent advice. If you want to know more about how the new rules will affect your pension then please call our friendly team now on 0161 495 9340 now or email us at enquiry@havenifa.co.uk.