Today the Government gave a clear green light to the radical rewriting of the pension rule book. The Government response to the 2015 ‘freedom & choice' consultation delivers on the Chancellor's Budget promise of much more Defined Contribution (DC) pension flexibility and provides further detail on some of the changes in store from next April. Advisers can now start planning in earnest to ensure clients make the most of this new pension freedom when it comes.

Today's announcement confirmed:

•DC flexibility will go ahead from April 2015.
•A £10,000 Annual Allowance will apply after a client accesses flexibility, to counter abuse of the new freedom.
•The "guidance guarantee" will be delivered by a range of independent providers, including Money Advice Service (MAS) and The Pension Advisory Service(TPAS).
•Tax-free cash will stay at 25%.
•Defined Benefit (DB) transfers will still be allowed - but only after professional advice.
•Death benefit tax will come down from 55% - we we have to wait until the Autumn Statement to find out what it will be!

There is bad news for some though :
•Normal minimum pension age is going up to 57* (from 55) from 2028

Further increases to the minimum pension age have also been factored in - the minimum pension age will be set at 10 years before the State Pension Age (which is due to increase to 68 in the 2030's and is likely to increase further).

* - Certain profesions in Public Sector Schemes (Emergency Service and Armed Forces) will not be effected by this increase.

So some good news....and some bad news! Should you want more information on the changes and how it will affect you personally, please contact us via the Contact Form.