What does the Chancellors pension revolution mean for us?

nrsql

Don't know if this would work but if you work through a limited company and can control your salary and are of a certain age it might be beneficial to pay into a pension scheme, take the 25% tax free lump sum and the rest taxed at your marginal rate rather than salary.

Means you get the 25% tax free and no NI?
Would presumably still need some salary but might be better than dividends?

Haven't read it carefully so may be wrong here.

I'm going to put this in a new thread.

Francesca7777

coastline wrote: »

might help..

Thanks for that, but it's still a bit vague about whether or not the 25% cash-free lump sum feature is still an option or not for 100% cash-ins post-April 2015.

atush

I don't assume that anyone should know otherwise - but I find it annoying when people ask me questions about "what plans do I have in place for when I am of retirement age"... Those sorts of questions force an answer really, and also imply irresponsibility on behalf of those who do decide to take advantage of this kind of opportunity. Let's just keep the dialogue based in fact and not supposition or assumption!

I can't help but try to tell people to NOT draw all their pension, esp if they only managed to save 38K by age 55?

I am sincerely worried for them.

You might find it annoying, but we will all be annoyed if we have to support those who withdrew the lot and spent it before they die. So yes, these questions can and will be asked here.

In your case, it could also (if your LE is above a year) worth considering an enhanced annuity that pays out much more for those who have poor health.

atush

Francesca7777 wrote: »

Thanks for that, but it's still a bit vague about whether or not the 25% cash-free lump sum feature is still an option or not for 100% cash-ins post-April 2015.

Seemed pretty clear to me yesterday during the budget speech that the 25% TFLS would remain.

Francesca7777

I think the best clarification of various points just doesn't exist yet. Whether or not you can withdraw 100% of funds under £10K or not at 55... Whether nor not you are still entitled to the 25% cash-free lump sum scenario in April 2015... There seems to be much lack of clarity still, as it's only been a day or two, and I think things will become clearer and more precise over the coming weeks.

Proxy

Francesca7777 wrote: »

I think the best clarification of various points just doesn't exist yet. Whether or not you can withdraw 100% of funds under £10K or not at 55... Whether nor not you are still entitled to the 25% cash-free lump sum scenario in April 2015... There seems to be much lack of clarity still, as it's only been a day or two, and I think things will become clearer and more precise over the coming weeks.

The first point (from now until 2015) is pretty damn clear. I posted a link to HMRC. If they're wrong, then god help us all.

Francesca7777

atush wrote: »

I can't help but try to tell people to NOT draw all their pension, esp if they only managed to save 38K by age 55?

I am sincerely worried for them.

You might find it annoying, but we will all be annoyed if we have to support those who withdrew the lot and spent it before they die. So yes, these questions can and will be asked here.

In your case, it could also (if your LE is above a year) worth considering an enhanced annuity that pays out much more for those who have poor health.

Stop worrying about people - it's just patronising. How do you know what someone has managed to save by the time they are 55? They may have loads of equity in a home, they may be self-employed and still earning quite comfortably, they may be quite financially secure and just want to release these "assets" to help their children... Or the may, for whatever reason, KNOW that they will not be around for more than another couple of years... Who knows? UNLESS someone is actually coming to you for financial advice, try and just stick to answering their questions factually.

Francesca7777

Well if TPAS, who is supported by the DWP, aren't clear about these details then there obviously must be 'some' ambiguity. For every one I've asked... i.e. pension advisors, TPAS, financial advisors, my fund managers, people here... there seems to be a different answer, or 'interpretation'. Maybe things are clearer as to what happens as of the 27th of March in a week's time, but there still seems to be much confusion with regard to the bigger picture in 2015. Anyway, I shall keep watching developments and wait for a more solid and clear interpretation. Thanks for everyone's help in the mean time...

Triumph13

Francesca7777 wrote: »

Stop worrying about people - it's just patronising. How do you know what someone has managed to save by the time they are 55? They may have loads of equity in a home, they may be self-employed and still earning quite comfortably, they may be quite financially secure and just want to release these "assets" to help their children... Or the may, for whatever reason, KNOW that they will not be around for more than another couple of years... Who knows? UNLESS someone is actually coming to you for financial advice, try and just stick to answering their questions factually.

I'm afraid I couldn't agree with you less on the above. Many, many new posters who come here with questions display a very high degree of financial illiteracy and are set on taking extremely unwise courses. The advice given to these individuals by people such as atush meets a very important need.

I'm sorry that it has upset you, and I can quite understand how it might in your situation, but even if atush and the the other helpful stalwarts on here upset ten people for every one they help avoid making a ruinous decision then I have them firmly on the side of the angels.

deejaybee

From previous employment I have a deferred final salary pension.

Normal retirement age for that scheme is 60.

I am 53 and a half now and was planning on taking it at 55, as I need the 25% lump sum to pay money owed to family.

2 questions:

1: Is it possible to take the lump sum, but leave the rest until age 60 - or is that dependant upon individual company scheme rules ?

2: Under George's new rules, could I take the whole pot at 55, obviously paying tax on amount left after 25% tax free taken ?