The Chancellor George Osborne, delivered his Spring Budget today.
Michelle Cracknell, Chief Executive of The Pensions Advisory Service has welcomed Budget 2014 saying ” This budget will be remembered for introducing “grown up” pensions where individuals have more flexibility. This is good news and reflects that the people who we talk to whose retirement plans are more fluid; people do not just stop working and draw a pension these days. Greater choice can however make decisions more complicated. We know that from the volumes of calls we take on retirement decisions. We look forward to providing this help to more people going forward in order to help them make pension decisions that suits their retirement plans.”
The budget represents a significant amount of change in the pensions and saving space. We highlight below the key pensions headlines:
- A Person's personal income tax allowance will be going up in April from £9,440 to £10,000.
- A person's lifetime allowance will go down from £1.5 million to £1.25 million (to find out more about lifetime allowance click here)
- The removal of the need to claim your money purchase pension pot as an annuity (pension).
- The triviality level will go up from £18,000 to £30,000.
- For flexible drawdown, the minimum pension income requirement will reduce from £20,000 per year to £12,000 per year.
- For capped drawdown, the maximum level that you can claim will increase from 120% to 150%.
- The small pots rule where you can cash in your pension pot if the value is below a certain amount will increase from £2,000 to £10,000.
- Voluntary National Insurance Class 3a will be open from October 2015 for 18months. The price will be set at an actuarially fair rate and the maximum additional amount will be £25 per week - further info from DWP shortly.
- The Government will offer a guaranteed guidance entitlement and will tell providers to talk to their customers about their pension benefits. A 12-week consultation will be released shortly.
If you want to talk through how any of these changes might affect you, please call one of our advisors on 0845 601 2923 or send us your questions through our web chat service which we will reopen tonight from 7pm until 9pm