Budget 2014 Pension Drawdown Flexibility

Budget 2014 Pension Drawdown Flexibility

The government will legislate to allow those with a defined contribution pension to draw down from it after age 55 from April 2015, subject to their marginal rate of income tax.

Capped drawdown

From 27 March 2014, the government will allow people with defined contribution pension wealth more flexibility to access their savings by increasing the capped drawdown limit to 150% of an equivalent annuity.

Flexible Drawdown

From 27 March 2014, the government will allow people with defined contribution pension wealth more flexibility to access their savings by reducing the minimum income requirement for accessing flexible drawdown to £12,000, subject to their pension scheme rules.

THESE FLEXIBLE DRAWDOWN RULES ARE THOUGHT TO ONLY BE A TEMPORARY MEASURE - IT COULD BE THAT THE £12,000 LIMIT IS REMOVED AND FLEXIBLE PENSIONS ARE MADE AVAILABLE TO ALL BY APRIL 2015.  THIS IS THE THOUGH PROCESS BEHIND THE NEED TO BUYING AN ANNUITY BEING TOTALLY REMOVED IN 2015 - although this is still at consultation stage.

Pensions Liberation

The government will legislate to give HMRC broader powers to prevent pension liberation with greater control over the registration and de-registration of pension schemes.  The changes will begin to take effect from 20 March 2014.

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