MSE News: Budget 2014: Radical reforms to give greater access to pensions savings

Froglet

Linton wrote: »

The £30K limit applies to the total of ALL pensions so you wont be able to get them as cash until/if the 2015 reforms come in.

I am already taking as an annuity a very small one and have 2 more,one at 10k and one at nearly 30k.If i convert the 10k into an annuity i presume this counts towards the total and not just the one that is still a lump sum? I am happy to wait a year and decide my options then,just wanted some clarification please.

thanks

jem16

Froglet wrote: »

I am already taking as an annuity a very small one and have 2 more,one at 10k and one at nearly 30k.If i convert the 10k into an annuity i presume this counts towards the total and not just the one that is still a lump sum?

They all count, including the one you have already converted into an annuity.

Deneb

clivep wrote: »

It is also not possible to make new contributions to any pension scheme once you have started flexible drawdown.

Clivep, you must be a mind reader. The same question occurred to me this afternoon whilst I was out walking. I was just going to post a similar question but thought I'd catch up on unread threads first!


Will this restriction still apply under the new proposals or is the intention to relax or remove it? I haven't been able to find an answer so far reading the budget documents.

scubascuba3

atush wrote: »

Where will you be retiring? You won't have a tax limit of you aren't tax resident?

Funny you say that, I was thinking the same as I pressed submit. I need to check the rules as I'm undecided whether to go permanent or just 7-8 months, I haven't looked at the not ordinarily resident rules for sometime

mojy

Can anyone clarify the situation with final salary pension schemes. I currently pay into a final salary pension scheme but have a final salary pension from an old job with is only for a small amount of money. Would I still not be able to access this pension at 55?

cepheus

mojy wrote: »

Can anyone clarify the situation with final salary pension schemes. I currently pay into a final salary pension scheme but have a final salary pension from an old job with is only for a small amount of money. Would I still not be able to access this pension at 55?

The new rules don't affect them, although there may be a restriction preventing people in public service pension schemes from transferring into a DC scheme

Many final salary schemes allow you to take it at 55, but it depends on the individual scheme and your own circumstances.

kidmugsy

mojy wrote: »

Can anyone clarify the situation with final salary pension schemes. I currently pay into a final salary pension scheme but have a final salary pension from an old job with is only for a small amount of money. Would I still not be able to access this pension at 55?

Check the T&Cs: there's every chance that they'd allow you to start the little pension at 55 but with an Actuarial Reduction. That means that you might be wiser to wait for the scheme's Normal Retirement Date. But it would depend on your own view of your financial position: after all, the AR is meant to allow only for the fact that you'll be drawing the pension for more years than otherwise, and that the capital will have been invested for a shorter time.

mojy

Have checked the conditions. Retirement at 65 or from 55 on medical or compassionate grounds. Don't know why they don't allow access to these pensions too if they're for such small amounts. would rather have access to the cash to help buy a property.

kidmugsy

mojy wrote: »

Don't know why they don't allow access to these pensions too if they're for such small amounts. would rather have access to the cash to help buy a property.

Because it's infinitely more complicated: in time something may come about, but it's far too complex for a Chancellor just to wave his magic wand at.

cepheus

mojy wrote: »

Have checked the conditions. Retirement at 65 or from 55 on medical or compassionate grounds. Don't know why they don't allow access to these pensions too if they're for such small amounts. would rather have access to the cash to help buy a property.

One possible reason why they might not allow you to change it to a defined benefit scheme is explained here

even relatively small numbers of savers saying they want out of final-salary pension schemes could could make huge waves in the market, if those funds were forced to cut their holdings of government and corporate bonds: the cost for the government and for companies of borrowing could rise pretty sharply, and could stay elevated, if pension funds' appetite and capacity to lend to them were permanently reduced.

Which is why in giving additional freedom to those in defined contribution schemes to do what they like with their money, the Chancellor is minded to give rather less freedom to those in defined benefit schemes - he has signalled he will probably ban members of final salary schemes from switching to defined contribution funds.