More choice and more control over how pensions can be accessed can only be good news, says OBC The Accountants.
Pensions have been headline news since George Osborne announced that about 13 million people in defined contribution pension schemes would no longer be forced to buy annuities. But OBC director Andy Hill says nothing is set in stone yet and that the devil will be in the details of the forthcoming consultations.
He said, “With more people living longer, the Government needed to do something to look at the way the pension system operated but no one really expected such radical changes.”
From April 6 2015, the Government intends to remove all retirement income limits for Defined Contribution (DC) pensions which means that everyone retiring with a DC pension pot will have access to flexible drawdown without having to satisfy minimum income requirement or give up on future pension saving.
“This gives much more scope for innovative financial planning tailored to client needs. However the future of transfers from defined benefit (DB) pensions to DC schemes is uncertain. Anyone looking to give up the guaranteed income from their DB scheme for the new found freedom in the DC world may need to act quickly before any legislation is introduced. It’s important to remember that a defined benefit scheme will still be right for a great number of pension savers and it is important they understand what they are giving up before transferring.”
For more advice call OBC The Accountants on 720555.