Pensions Guidance

Pension Guidance

In The 2014 Budget the chancellor of the exchequer George Osbourne announced significant and far reaching changes to pension legislation. These changes were engineered to allow more flexibility for people reaching retirement age of 55 in April 2015, it's aim was to give people more freedom to choose what they want to do with their own hard earned pension pots.(see our guide to 2014 immediate changes).

George Osbourne stated "People who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances. And that's precisely what we will now do. Trust the people. I am announcing today that we will legislate to remove all remaining tax restrictions on how pensioners have access to their pension pots. Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want. No caps. No drawdown limits. Let me be clear. No one will have to buy an annuity. And we're going to introduce a new guarantee, enforced by law, that everyone who retires on these defined contribution pensions will be offered free, impartial, face-to-face advice on how to get the most from the choices they will now have".

This 2014 budget change confirmed that everybody retiring from April 2015 in a defined contribution pension scheme, would be entitled to free face to face advice.

This impartial advice is guaranteed however after consultation with industry experts the offer of free advice has been changed to 'free guidance'.

This 'pension guidance' will be provided by independent bodies like the pension advisory service and money advice service and will be funded by a contribution from the government and levies on regulated firms.

The guidance will focus on providing information on the options available at retirement in April 2015 namely your tax free lump sum, income options, annuity options,drawdown options and tax advantages and disadvantages. It may also cover your deferral options and rates of tax payable.

Because it is not advice people will have to reach their own decision on which is the best option for them,this is the time when the wrong choice can be costly and irreversible.choosing the right retirement option is a complex procedure and should be taken in conjunction with a pension expert.

Pension guidance will confirm that if you are in any doubt you should find a qualified adviser who is registered with the Financial Conduct Authority.

It is estimated that 300,000.00 people will retire and need specialist pension advice from April 2015 , an adviser sourced from the Pension Adviser Network will be able to help you make the right choice and get the best from your pension pot. He will be able to clarify your 2015 drawdown options, your 2015 annuity options and fully explain and calculate your 2015 budget taxation limits and rates of tax due on your retirement pot.

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