PENSIONS: HMRC guidance available on new pensions
With big changes coming up in April 2015 to the way that pensions can be drawn, the Government is keen to ensure that the public has access to free, impartial guidance around the new system to enable retirees to make the most of their pension savings.
Subsequently, HMRC have released guidance covering the three core options to enable access to pension funds, being:
- Lifetime annuity
- Flexi-access drawdown
- Lump sum payment
Broadly, the new Pensions Reform allows anyone with a defined contributions pension, such as a SIPP, to draw their pension from age 55. Funds can be drawn in part or as a lump sum or as a combination.
Read more: Flexible Pensions.
The guidance details all withdrawals from a lifetime annuity or flexi-access drawn are subject to income tax, as is 75% of a lump sum payment – the first 25% of a lump sum withdrawal is tax free.
The amount of income tax will depend on other taxable income within the year combined with the tax allowances available to the individual taxpayer.
In addition, HMRC have teamed up with The Citizens Advice Bureau and The Pensions Advisory Service to offer a new service – Pension wise. The website is under development but the service will be online, telephone and even face-to-face.
Figurit help many doctors and dentists with pension planning and advice. We work with specialist financial advisers so between us we can advise from a financial and tax perspective. Call today to discuss your pension plan.
020 7376 9333
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