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George Osborne hails pension change 'revolution' | George Osborne hails pension change 'revolution' |
(4 months later) | |
Major changes to UK pension rules come into force at midnight, in what Chancellor George Osborne has called "a revolution". | Major changes to UK pension rules come into force at midnight, in what Chancellor George Osborne has called "a revolution". |
He said the moves were the "biggest changes to pensions in 100 years". | He said the moves were the "biggest changes to pensions in 100 years". |
People aged 55 and over will be given new powers to decide what to do with their retirement savings. | People aged 55 and over will be given new powers to decide what to do with their retirement savings. |
From Easter Monday, they can cash in Defined Contribution (DC) pension savings. But there have been warnings about potentially big tax bills. | From Easter Monday, they can cash in Defined Contribution (DC) pension savings. But there have been warnings about potentially big tax bills. |
Mr Osborne told Sky's Murnaghan programme: "What it means is that people who have worked hard and saved hard can have access to their pensions savings." | Mr Osborne told Sky's Murnaghan programme: "What it means is that people who have worked hard and saved hard can have access to their pensions savings." |
He also urged people to make use of the government's guidance scheme. | He also urged people to make use of the government's guidance scheme. |
The Pensions Advisory Service (TPAS) will run the Pension Wise guidance service for those approaching retirement. | The Pensions Advisory Service (TPAS) will run the Pension Wise guidance service for those approaching retirement. |
Pension changes 2015 | Pension changes 2015 |
Pension savers will no longer be required to use their pension pot to buy an annuity when they approach retirement. | Pension savers will no longer be required to use their pension pot to buy an annuity when they approach retirement. |
Some 540,000 people will be able to take control of their savings from 6 April, according to the government. | Some 540,000 people will be able to take control of their savings from 6 April, according to the government. |
But the Institute for Fiscal Studies (IFS) has said many people face paying tens of thousands of pounds in income tax if they cash in their pensions pots. | But the Institute for Fiscal Studies (IFS) has said many people face paying tens of thousands of pounds in income tax if they cash in their pensions pots. |
But the Treasury says they have consistently stated that 25% of people's pensions is tax free and the rest is taxed at the marginal rate. | But the Treasury says they have consistently stated that 25% of people's pensions is tax free and the rest is taxed at the marginal rate. |
There have also been concerns that some people may by hit by pension scams, or run out of money too early. | There have also been concerns that some people may by hit by pension scams, or run out of money too early. |
Labour have welcomed the new pension flexibilities, but say they have repeatedly warned that the government has not thought through the risks of "rip-off charges" being taken from people's savings. | Labour have welcomed the new pension flexibilities, but say they have repeatedly warned that the government has not thought through the risks of "rip-off charges" being taken from people's savings. |
"That's why we welcomed the announcement by David Blake's Independent Review of Retirement Income that they are studying the case for a new charge cap on pension products offered to savers by their pension provider to replace annuities," said a Labour spokesman. | "That's why we welcomed the announcement by David Blake's Independent Review of Retirement Income that they are studying the case for a new charge cap on pension products offered to savers by their pension provider to replace annuities," said a Labour spokesman. |
Do you plan to cash in part of your pension? You can share your experiences by emailing haveyoursay@bbc.co.uk. | Do you plan to cash in part of your pension? You can share your experiences by emailing haveyoursay@bbc.co.uk. |
If you are willing to speak to a BBC journalist, please include a contact telephone number. | If you are willing to speak to a BBC journalist, please include a contact telephone number. |
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