19th March 2014
Today’s budget has some of the most dramatic changes to the pensions and savings arenas that we have seen in many years.
To underpin the wide ranging changes to how people access their defined contribution (DC) pension scheme. It has been announced that from April 2015 everyone who retires with a DC pension must be offered free and impartial face to face guidance on their choices at retirement.
There will be a new duty for pension providers and trust based pension schemes to offer this ‘guidance guarantee’.
This is great news for pension savers and is already at the heart of the service that WEALTH at work provides for our many corporate partners and individual customers.
In addition from April 2015 tax rules will change to allow people to access their defined contribution pension savings as they wish from the point of retirement. This means that an individual will be able to withdraw their pension savings at a time of their choosing subject to their marginal rate of income tax.
The Budget has also introduced a number of immediate changes effective from March 27th.
These changes really are great news for pension savers and introduce a much greater degree of flexibility and control over the way pension savings can be used.
It is essential for individuals to take advice to ensure that the choices they make now and in the future are in their best interests.
It is also essential for providers and sponsors of schemes to contact us to find out how we can help you deliver your new responsibilities.
The New ISA heralds a major reform of the current ISA system.
Jonathan Watts-Lay, Director of WEALTH at work comments, “These are the most welcome Budget changes we have seen in many, many years. They bring a great deal of freedom and flexibility to pension savers and remove the need to have a specific amount of secured pension to be able to access all options. At the same time it makes it essential for individuals to take advice to ensure that they make the choices that are in their best interests”.
Commenting on the impact on employers and pension scheme providers he said, “the foundation of our service is the provision of high quality face to face financial education that covers all of the retirement income options available to employees. We have educated many thousands of employees about their options at retirement and have strong partnerships with corporates who have already recognised the need for this important service. This is supported by strong empirical evidence from those who have benefited from our guidance. For companies and pension schemes who want help in delivering against their new responsibilities, I would urge them to contact us without delay as I believe our tried and tested guidance service to those at the point of retirement meet the new obligations outlined in today’s Budget”.
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