Budget Summary 2014 - page 6

page 6
BUDGET
19 MARCH 2014
Income drawdown
Pending further potential changes from April 2015, there are two
revisions to income drawdown rules:
• For pension years starting on or after 27 March 2014, the
capped drawdown limit will increase from 120% to 150% of an
equivalent annuity.
• The minimum income requirement for accessing flexible
drawdown will be reduced from £20,000 to £12,000 from
27 March 2014, subject to pension scheme rules.
Small pots and pension commutation
From 27 March 2014, the size of small individual pension pots that
can be taken as a lump sum regardless of total pension wealth will
increase from £2,000 to £10,000. From the same date, the number
of small pots that can be taken as lump sums will increase from
two to three. Separately, from 27 March 2014, the amount of total
pension wealth that may be taken as a trivial commutation lump
sum will be increased from £18,000 to £30,000.
Pension commencement lump sum: the tax-free lump
sum
The pension commencement lump sum – generally 25% of the
pension pot – will continue to be available, but there
will be consultation on separating the lump sum
from the requirement to draw a pension benefit.
Any change will take effect from April 2015.
Pension ‘liberation’
From 20 March 2014, HMRC will be given
broader powers to prevent pension ‘liberation’,
with greater control over the registration and
deregistration of pension schemes.
Individual protection
Individual protection 2014 (IP14) will be introduced
from 6 April 2014, as previously announced. Individuals
with IP14 will have a lifetime allowance equal to the total
value of their pension savings on 5 April 2014, subject to an
overall maximum of £1.5 million.
think ahead
You should review your
retirement plans
especially if you are close
to drawing your pension.
The rules are changing very
shortly and there will be
more reforms in 2015.
>
I,1,2,3,4,5 7,8,9,10,11,12,13,14,15,16,...17
Powered by FlippingBook