Pensions reform

 

Ahead of Wednesday’s Budget the Chancellor has announced the government is to offer its new pension freedoms to around five million people who have already bought an annuity say Harris & Co chartered accountants Northampton

From April 2016, the government will remove the restrictions on buying and selling existing annuities to allow pensioners to sell the income they receive from their annuity without unwinding the original annuity contract, in an extension of reforms announced a year ago.

 

This will give these pensioners the same options as those announced in Budget 2014 for savers who reach retirement with a pension pot. Both those who have taken an annuity and those approaching retirement will have the freedom to use that capital as they want.

 

The new flexibilities are due to come into effect on 6 April, and allow people to make their own choice about what they do with their savings in retirement. This could include being able to draw down from their defined contribution pension pots incrementally or taking their pension as a lump sum.