From next April, the chancellor wants you to be able to do what you like with your pension savings once you reach age 55, new rules mean if you want to spend your whole fund you can; if you want to take out a bit at a time, you can; if you want to use your pension fund like a bank account, you should be able to do so.
But you don’t have to do anything! Many people approaching retirement age will have personal pension plans started in the 1980s or 1990s. When setting up these funds, you would have been asked to select a retirement date and many would have chosen a birth date between 55 and 65.
About six months before your chosen pension age, the pension company will send out a ‘wake-up pack’, offering you an annuity. When you get this kind of pack, you may think you have to do something, but you don’t have to and if you are still working, or if you have other pension income, you may benefit from leaving the fund alone to earn extra tax-free investment returns, rather than buying a product, or transferring it or withdrawing the money.
In the past people have tended to believe they had to automatically buy an annuity or income drawdown product, but you don’t and there are lots of other thing you may want to do with your pension. The ‘do nothing’ option may still be a good one, Enables IFA’s in Bishop’s Stortford can help you with your retirement planning if you’re not sure what’s best.
Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE