Pensions Simplification

‘A’ Day (Appointed day) arrived on 6th April 2006 and brought with it sweeping and radical changes for all pension plans – whether occupational or personal.

From this date there will be just one set of tax rules for all types of pension, with an individual Lifetime Allowance (£1.8 million - 2011/2012, but falling to £1.5 million in April 2012), and an individual Annual Allowance (£50,000 - 2011/2012). All individuals will be able to fund up to these new attractive limits. Exceeding these limits will simply trigger a tax charge.


The ‘A’ Day rules made the majority of pensions much simpler and there could be a number of key advantages

• Pensions are much easier to understand.

• Most customers now have greater flexibility in the size and timing of their contributions.

A number of other changes include :-

• Early retirement age has risen from age 50 to age 55 on 6th April 2010

• Full concurrency (i.e. being able to pay into any array of plans you wish), subject to the annual allowance

• Wide investment flexibility

• Up to 25% Tax Free Cash will be available from the majority of pension schemes.

• The ability to commute ‘small’ funds of less than £18,000 as a one off lump sum as opposed to having to draw a regular income

• Flexible options at retirement when deciding to take benefits

• No need to ‘have to’ secure benefits at age 75 via an annuity

Why not contact us to review your retirement planning?