Following changes announced in the Budget people will have complete flexibility, once they reach age 55, to take their benefits when and how they see fit. Up to 25% will be tax-free with the remainder being taxed at the individual’s highest marginal rate. You could blow the lot on fast cars, Bingo and beer…
However, with that freedom comes a huge risk and the possibility of unintended consequences. Many retirees are naturally conservative so while increased flexibility may have some appeal, they will also want to make sure they have long-term guaranteed income – a hedge against living too long.
Independent advice will be key in helping people take advantage of the new flexibility rules and tax planning, while ensuring they have a sustainable lifetime income.
If you have any questions, please don’t hesitate to get in touch!