What The New Flexible Pensions Rules Mean To You

Chancellor George Osborne has revealed the nuts-and-bolts of how the new flexible pension rules will work for retirement savers.

The sweeping measures will go before Parliament in a new Taxation of Pensions Bill which is expected to become law in time for the new rules to start from April 6, 2015.

This is how his proposals will affect pension savers:

Who is affected?

The new law will cover anyone who has reached the normal minimum pension age of 55 years old who have money purchase pension savings.

This covers defined contribution schemes like workplace pensions, personal pensions, self-invested personal pensions, drawdown pensions and Qualifying Recognised Overseas Pension Scheme (QROPS).

What are the changes?

The 55% unauthorised drawing tax charge is scrapped, so anyone aged 55 or over can take single or multiple withdrawals from their pension funds.

All caps and drawdown qualifying rules, such as the minimum income rule of £12,000, will be axed from April 6, 2015.

Anyone already in capped drawdown can