Budget surprise — full access to DC pensions from April 2015

By Jennifer Bell

In a shock Budget, the chancellor has confirmed that from April 2015, anyone over the age of 55 will be able to take their entire defined-contribution (DC) pension pot without any requirement to purchase an annuity or be subject to income drawdown.

It is proposed that, from April 2015, 25 per cent of the pension savings will be available as a tax-free lump sum (as at present) but in addition the member will be able to take the remainder of his pension savings as a lump sum also, taxed at his or her marginal rate of income tax in that tax year. For example, if the individual was a basic-rate tax payer, he would pay 20 per cent tax on the remaining 75 per cent of his fund (at current rates)…

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