Major reforms to the United Kingdom pension regime were announced by the United Kingdom Government this year.
Retirees in defined contribution pension schemes will no longer be obliged to buy an annuity under Pensions Act 2014. Instead you will be able to withdraw your entire pension savings to invest or spend as you wish. And have greater flexibility in terms of the size, timing, and number of withdrawals you can make.
You will still be able to withdraw up to 25% of your pension as a tax-free lump sum (up to 30% with QROPS). However, the remainder will be taxed at your marginal rates rather than the current, flat 55% rate.
If you are in a defined benefit (‘final salary’) pension scheme, rules are unlikely to change and there may be restrictions on transferring your pension to a defined contribution scheme.
Non United Kingdom residents with United Kingdom pensions need to consider local tax rates in their country of residence before withdrawing pension savings. McMillen Consultants provides advice on how to access your pension pot wisely and to minimise your tax implication.
Click here to send us an enquiry – without obligation
Or call +44 28 9177 0131