04 August 2015
ARGYLE WELCOME THE NEW PENSION FREEDOMS BUT STRESS THE IMPORTANCE OF INDEPENDENT ADVICE
Argyle Consulting Head of Pensions and Operations, David Webster, has welcomed the new pension freedoms which came into effect on 6 April 2015, but urges caution and stresses the importance of seeking quality independent advice.
Under the new pension rules, individuals can access all of their defined contribution savings from age 55, with no obligation to buy an annuity. Only 25% of the pension pot can be taken tax-free – with the remainder being taxed at the individual’s marginal rate of tax.
David Webster commented:
“Argyle welcomes the principles behind the new pension freedoms, however, we believe that the need for quality, impartial advice has never been greater. With the new rules, comes greater choice and opportunity - making it far easier for individuals to make costly and irrevocable mistakes.
Whilst it may be appealing to withdrawn your entire pension pot as cash, we would urge caution. Overspending in the early years, may result in living in poverty later on - and with over a third of people now living beyond 90, this could be a very real possibility for many.
It’s also critical that people are properly advised about the significant tax implications of withdrawing more than 25 per cent of their pension pot. There are a range of tax efficient options available, which can help individuals to reduce their income tax liabilities.
I would urge those approaching retirement to seek independent financial advice at the outset, as this can save money in the long-term. I believe that with our help, retirees can enjoy their retirement and really benefit from the new pension freedoms.”