The UK Budget brings sweeping new rule changes for small pension pots. It increases the freedom to take more money sooner and get better access to funds.
BRITISH RETIREMENT SAVERS: The good news got announced in the 2014 UK Budget.
The change in pension pot regulations clears the path for new rules to become law from March 27th.
Thus, lump sums increase from £2,000 up to £10,000 for holders of small pension pots.
It means the amount available to each individual has risen in real terms. This is true no matter what the extent of an individual’s personal wealth and without the need to buy an annuity.
The captive market targets around three quarters of retirees. They are the ones with typical 401k style pensions who would choose to buy annuities.
There are obvious benefits for around 150,000 UK pensioners. But, the rule change is also expected to affect the sales in annuities.
According to the Association of British Insurers, close to 25% of all annuity sales currently exist because of the present shortfall in cash funds available for retired pension pot owners in the United Kingdom.
The British government also revised the number of pension pot lump sums you can take. They increased it from two to three.
Note: They also raised the single small pension cash takings up from £18,000 to £30,000.
You could say the improved new system will provide choice and freedom to those who are best informed about it. No-one understands personal health and financial circumstances better than the retired saver.
Business and Finance News: Key headlines about business regulations and financial rulings.
Cashing in Pension Annuities: New options to cash in your pension annuity start from April 2017.
Pension Scams: Bans will now include the use of emails and texts in private pensions cold calling.
State Pension Rules: The old age pension starts when you reach the official retirement age.
Workplace Pension Rules: The government operate a pension scheme supplying a monthly allowance.
Budget Delivers New Pension Pot Rules in the United Kingdom