Earlier this year George Osborne announced an important change to pensions legislation. Here are a few pointers from Bury Financial Advisers to understanding what they might mean for you.

Although there are quite a few changes happening, the one to grab the attention of both the public and the media is the ability, after April 6th 2015, to take all of your money purchase pension as a lump sum. The rules are different if you have a final salary scheme - typically provided by the NHS, Local Authorities and a few of the very large employers.

Since then there has been a flurry of media speculation on what this will mean for those with pension plans; there have also been further announcements made by Mr Osborne.

Whilst the changes are far too broad to attempt to cover in any detail, there have been some questions which keep cropping up and I thought it migh be worthwhile to answer a couple here:

- When will I be able to take my pension?

Although the legislation has not been passed yet, it is proposed that this will possible if you are aged 55 or over  after April 6th 2015. It may be possible for you to take it now under some special concessions if the value is small and you are aged over 60.

- Will I be able to take it as and when I please?

The legislation allows you to do this, but your pension contract may not. Many providers will not be able to alter their systems or it may be uneconomical for them to do so. It is unclear how this will be dealt with, but it is entirely possible that, even though the law allows you to do something, your pension provider will not.

It is usually possible to move providers or contracts but this can be expensive, you could lose potentially valuable guarantees or, in some cases, a right to take more than 25% of the fund without paying tax - so it is important to seek proper advice before doing so.

Finally, remember if you take your pension that, although some (normally 25%) will not be taxed, the rest will be added to your income for that tax year - so you could be landed with a hefty tax bill if you do take it without careful planning in advance.

As always I am more than happy to answer any questions you might have - however seemingly trivial; I won't make a charge for this if you mention Best of Bury so please do get in touch!
 
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