MARCH 2014 BUDGET – Makes Annuity Advice More Relevant
With the change in the rules on the purchasing of annuities in the recent UK budget, there are daily releases of information which people coming up to the retirement age should be keeping abreast of. The UK government announced yesterday that thousands of savers who had requested annuities immediately before the Budget will be allowed to walk away from the transaction.
This change in policy will allow them to take additional and supplemental advice as to the best options fro them moving forward into their retirement. Although as in the words of George Osbourne ” nobody will have to buy an annuity” from April 2015; it is still highly recommended that individuals consult an Independent Financial Advisor ( IFA) to walk them through the options and the pitfalls of the recent changes in the law and the direct implications on their personal finances moving forward.
Individuals will now have up to 18 months to decide how to spend their hard earned savings, presently tied up in their pension pot. This increases the options open to pensioners who can take their tax free cash and then decide strategically as to the optimal means of making their income stretch over their remaining lifetimes.
Although, it might be easy to make a “knee-jerk” reaction, and make a substantial purchase like a car or a cruise, it will still be very important given the sums of money at stake to take independent financial advice, to ensure that all considerations have been fully thought through both for the current day but for the future also.
It is encouraging to note that HMRC has said that pensioners who had already taken the tax free cash would not be compelled to take out an annuity, as would have been the normal course of events pre Budget. Pensioners will receive an extension until September 2015 to finally decide the best bespoke solution for them.
The Annuity Advice company welcomes the changes in the legislation and embraces such foresight to ensure that potential and current pensioners can take the maximum benefit from their hard earned savings in their pension pot.
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by: Annuity Advice on Tuesday 08/04/14