Pension Services From the 6th April 2006 new rules were implemented by the government under the title Simplification. This new legislation largely replaced much of the previous pension regulations.

Lifetime Allowance

For this present tax year - 2016/17 the maximum permitted tax exempt fund at retirement is £1.0 million.


Contributions and Annual allowance

The figure for the year (2011/2012) had been reduced from £255,000 to £50,000.

For the current tax year the figure is £40,000. Anyone can contribute up to 100% of their earned income subject to the annual allowance or £3,600 if they have no earned income and receive tax relief.

Eligible members of registered pension schemes may carry forward unused annual allowance of up to £40,000 a year for 3 years from 2010/2011

Pension Commencement Lump Sum (tax free cash)

A maximum of 25% of the value of the pension fund can be taken tax free. (some transitional protection can be applied for if built up prior to 2006.)


Retirement age

Since 6th April 2010 the minimum retirement age is 55.


Death Benefits

The maximum is equal to the lifetime allowance which presently is £1.0million

The value of your investment can go down as well as up and you may not get back as much as you put in.

Drawing your pension

You can do this in one of 4 ways:

  • Scheme pension - This is drawing from an employer's occupational scheme.
  • Lifetime Annuity - Basically this is exchanging your pension fund for an income.
  • Unsecured pension - This is income drawdown.
  • Alternatively secured pension - This is available from age 75.

In the Budget, the Chancellor announced on 20th March 2014 that the Pension money could be taken as a whole and therefore there is no requirement to buy an annuity.

These are the main headlines of Simplification. There is much "small print" which may affect different people in different ways. Contact us for advice.

Pensions