Rewritten retirement rules
Looking to discover what you can do with your pension pot?
In 2015, the retirement rules were rewritten. The rules, which came into effect from 6 April 2015, have changed the way people take money out of their pensions. New freedoms and options are available to anyone over the age of 55.
Pension freedom tax rules allow members of defined contribution pension schemes to access their pension savings early, provided they have reached the required minimum pension age (currently 55).
Scheme members can now take their pension benefits in a number of ways. This could be as:
Through the second quarter of 2020 (between April and June), £2.3 billion was withdrawn from pensions flexibly – a 17% decrease year-on-year from £2.8 billion (second quarter 2019). However, the total value of flexible withdrawals from pensions since flexibility changes in 2015 has exceeded £37 billion.
The second quarter of 2020 saw 340,000 individuals withdraw from pensions, this is a 1% increase from 336,000 in the same quarter of the previous year. However, there has been a decrease in the number of individuals withdrawing compared to the previous, first quarter of 2020 (348,000), which is contrary to normal seasonal patterns.
The average amount withdrawn per individual in the second quarter of this year was £6,700, falling by 18% from £8,200 in the same quarter last year.
If you’re 55 or over and have a defined contribution (money purchase) pension plan, you can:
To have a discussion about your pension options as part of your wider financial planning goals please contact us to discuss on 0161 819 1311 or find further information here.
Source data: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/904548/Pension_Flexibility_Statistics_July_2020.pdf