The government this week eased up on strict rules put upon pensions. Starting in April investors will be given the choice to draw income, take an annuity, or take their pension assets as a lump sum.
New rules will also allow pensions or those who die early with pension funds to leave some of the asset to their families. At present if the pension money is not put into annuity the left over cash is subject to an 82 per cent tax. Under the new rule it would be a 55 per cent tax called a “recovery charge.” There will be no liability to IHT.
Billy Burrows, of Burrows & Cummins, annuity specialists, stated this was very good news for investors: “Those with bigger pension funds who can meet the requirements of a minimum level of income will have much more flexibility.”