“Greater pension flexibility and the death tax changes offer huge opportunities but it is important to remember that everyone's core goal is still the same – to build up a savings pot which will allow them to live as comfortably as possible for as long as possible.” says Andy Bell, chief executive of AJ Bell. “We are living longer, while low returns on cash and annuities also mean we need to save more. There is no one 'right' answer which will work for everyone and pension holders should take their time to assess all of the issues outlined in our checklists before they do anything.”
The case against taking funds from your pension |
The case for taking funds from your pension |
It is there to provide an income in your retirement |
You can pay down debts and remove financial worries |
Your savings will be exposed to income tax |
You can help your family with their financial needs |
Portfolio profits will be exposed to capital gains tax |
You can invest in assets not allowed in a pension |
A lump sum withdrawal could suffer income tax |
A small pension may not provide a lot of income |
Pensions can bring new tax benefits upon your death |
The new rules may change again in the future |