Our website uses cookies to enhance the visitor experience (what's a cookieCookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.). Are you happy for us to use cookies during your visits?
Please note: continuing without making a choice equates to giving us your consent, which you can withdraw at any time via our cookies policy page.

Pension freedom or liberation?

Newsletter issue - April 2015.

Pension freedom is a GOOD thing. The change in law from 6 April 2015 means that members of defined contribution pension schemes who are aged 55 or more should be able to draw what they want from their pension schemes. But "pension liberation" is a BAD thing. This is when scammers use confidence tricks to separate taxpayers from their pension savings, and the taxpayer has to pay high charges and tax penalties. Can you tell the difference?

If you are thinking about taking funds from your pension plan, you need to think carefully about all the implications. The Government has set up a website: www.pensionwise.gov.uk, which provides basic guidance on the six steps to take before accessing your pension savings. There will also be free face to face meetings, and telephone support, where you can learn about your options.

If you want to invest your money outside your pension fund, you should take advice from a qualified financial adviser who is registered with the Financial Conduct Authority (FCA). The Money Advice Service website (also Government backed) has some good tips about how to choose a financial adviser.

Beware of taking large sums out of your pension fund in one go, as this may push you into the 40% or 45% tax bands. We can help you calculate how much tax you will have to pay when you access your pension savings.

Taking flexible income payments from your pension scheme is an irreversible process, you can't put all the money back into the pension scheme if you change your mind. You may also be restricted to making pension contributions of no more than £10,000 per year, rather than the current cap of £40,000 per year. A withdrawal of tax-free cash from the pension scheme, or a transfer of funds into a pension annuity does not count as a "flexible income payment" for this purpose.

The decision to start drawing your pension benefits should not be taken lightly, or without qualified advice.

  • Auto enrolment icon

    Auto Enrolment

    Workplace pensions rules are changing.
    Be prepared for auto enrolment, see how we
    can help and read up on our guidance notes.

    More

  • Cloud accounting icon

    Cloud Accounting

    With our online bookkeeping packages, our support
    services are only a click away.
    Discover cloud accountancy solutions to bring your finances up to date.
    More

  • Pay less tax icon

    Pay Less Tax

    Our experienced tax advisors can help you
    make the most of your options to reduce
    your tax bills.

    More

  • Make more profit icon

    Make More Profit

    From business plans to management accounts,
    our business services will ensure you are in
    control of your business finances.

    More

  • Source finance icon

    Source Finance

    Our experienced partners can guide you
    in getting the finance you need to make
    your business grow. Read our guides or
    contact us for a free consultation.
    More

  • Outsource your payroll icon

    Outsource Your Payroll

    Let us handle payroll compliance for your
    business. We can deal with HMRC on your
    behalf, and take the stress out of RTI.

    More