New system to encourage further pension saving

Currently someone that is in income drawdown cannot receive tax relief on future contributions. To help encourage further pension saving under the new system:

If they’re currently in flexible drawdown, they will have a new annual allowance of £10,000

If they drawdown more than 25% tax-free lump sum from a defined contribution pension, they will still be able to make further tax-relieved pension contributions to a defined contribution pension of up to £10,000 per year. If you have any questions on if this is something you should do then seek independent financial advice.

The lower annual allowance will only apply if they’re taking a pot worth more than £10,000. If
they take a pot under £10,000, the standard annual allowance will apply, if you are unsure if you should taken more than£10,000 or less due to your personal circumstances at the time then seek independent financial advice.

If they’re in capped drawdown on 5 April 2015,
they will benefit from the standard annual allowance until you take advantage of the new flexibilities and withdraw more than the maximum capped drawdown amount – when the £10,000 annual allowance would then apply

If you are unsure on what to do with the pension benefits that will soon becoming into place due to your personal circumstances and wish to take independent financial advice, we at Hutt Professional will be able to provide you with a financial adviser with many years of experience who will be able to offer you independent financial advice when ever you may need it. If you are located in Leamington Spa or surrounding areas then please do not hesitate to contact us.