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Pensions reform Q and A: What do the new rules mean?
Monday 6 April saw huge changes to the way pensions work, giving greater power to savers over how they can use their pension money. Here's what you need to know.
Q How will the new pension reforms impact on the UK’s savers?
A The new freedoms mean savers can withdraw their entire pension pot in one transaction, or take it as they require it – and they do not have to purchase an annuity as was previously the case.
Q Is there anything that savers have to do with their pension pot?
A No, people can spend, or re-invest, their savings in whatever way they like. Or they can leave their funds untouched.
Q Will everyone be affected by the new freedoms?
A The changes to the pensions rules will apply to all savers aged over 55 years.
Q Will people be taxed if they choose to use their new freedoms?
A Savers will not pay tax on the first 25 per cent of pension cash they withdraw. However, after that they will be taxed at the normal rate.