Pensions are much more flexible than they used to be.
From April 2015 pensions investors aged 55 and over became able to draw from their defined contribution pension fund, exercising a range of flexible options to suit their circumstances. This provides far greater pensions’ freedom than before.
This may be attractive for many pensions investors, however caution is required because although 25% of the available fund can normally be withdrawn tax free, the balance of any money withdrawn from pensions will be subject to income tax at the individual’s highest marginal rate.
There may also be other implications with regards to death benefits, entitlements to state benefits and long term care planning, to name a few. Each and every person with a pension scheme will need to review their financial planning accordingly and if you’re thinking of taking a pension worth more than £30,000 you must get professional advice.