Pension withdrawal options from 6 April 2015
Here’s a brief summary of the main withdrawal options that became available following the 6 April 2015 pension rule changes. The pension arrangement(s) that hold your savings may not offer all of these options; check with your existing provider(s) and ask your financial adviser how the new flexibilities could work for you.
- You can withdraw some, or all, of your pension savings from the age of 55* onwards.
- You may be able to withdraw some, or all, of your pension savings (up to a maximum of £30,000) using the ‘small pots’ rules from the age of 55*. Click here to read more about small pots payments.
- Normally, 25% of any uncrystallised fund (up to your remaining personal lifetime allowance limit) can be paid as a lump sum tax free.
- The remaining uncrystallised fund and any drawdown fund can be taken as a taxed lump sum and/or used to provide taxable income via a lifetime annuity and/or a drawdown pension. (A drawdown fund can remain invested and it does not have to provide any income).
- You can leave your pension savings, more tax-efficiently**, to more people, in more ways, when you die. From 6 April 2016, if you die aged at least 75, new tax rules will apply to your beneficiaries. Click here to see a summary of the changes due from that date.
*These withdrawal options may be available to you earlier if you either have a protected pension age or you are retiring on grounds of ill-health or serious ill-health.
**The tax treatment and efficiency of these options will depend on the individual circumstances of each customer. Tax rules and their application may change in the future.
Find out more about your investment and income options for your pension from 6 April 2015 in our ‘New choices’ guide.