‘A’ Day (the Appointed day) arrived on 6th April 2006 and brought with it sweeping and radical changes for all pension plans – whether occupational or personal.
From this date there will be just one set of tax rules for all types of pension, with an individual Lifetime Allowance (£1.8 million – 2012/2013, but falling to £1.5 million in April 2012), and an individual Annual Allowance (£50,000 – 2012/2013). All individuals will be able to fund up to these new attractive limits. Exceeding these limits will simply trigger a tax charge.
The ‘A’ Day rules made the majority of pensions much simpler and there could be a number of key advantages
• Pensions are much easier to understand.
• Most customers now have greater flexibility in the size and timing of their contributions.
There are also a number of other changes including :-
• Early retirement available from age 55
• Full concurrency (i.e. being able to pay into any array of plans you wish), subject to the annual allowance
• Wide investment flexibility
• Up to 25% Tax Free Cash
• The ability to commute ‘small’ funds of less than £18,000 as a one off lump sum as opposed to having to draw a regular income
• Flexible options at retirement when deciding to take benefits such as capped and flexible drawdown
• No need to ‘have to’ secure benefits at age 75 via an annuity
Why not contact us to review your retirement planning?