Changes to Drawdown April 06
From the 6th April 2006 there were some
huge changes in the rules governing pensions. This was commonly referred
to as "A Day".
The Government
instigated these changes in order to simplify the different rules and
regulations. One of the main changes was the introduction of
income drawdown for those over aged 75. The key changes, and revised
terms are described below.
Income withdrawal – under
75s - Unsecured Pension
-
No requirement to take
any income
-
Maximum income to stay broadly the same as
current rules
-
GAD limit reviewed every five years
-
Tax-free cash available from Protected Rights
which are benefits accrued by contracting out of the Second State
Pension, previously know as Serps
-
Death benefits to stay the same
Income withdrawal for the
over 75s - Alternatively Secured Pension
-
Available for the first
time
-
Income maximum restricted to 70% of GAD rates
-
Death benefits not available as a lump sum
-
No requirement to buy an annuity
-
Funds can be passed to family members
-
Possible Inheritance Tax liability on death
If you want to know more then
please do not hesitate to
contact us, to discuss the implications of
these changes for you.
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