The Taxation of Pensions Act 2014 allows pension savers who have reached pension age to draw from their pension funds without limit from 6 April 2015. This radically changes the principle that pension savings should be used to provide an income over the saver’s lifetime. There are also fundamental changes to the benefits available on death.
Savers making use of the new pension freedoms are said to have ‘flexibly accessed pension’. They can do this in a number of ways. Three likely, popular ways in which they may do so are by drawing income from a ‘Flexi-Access Drawdown’ fund, receiving an ‘Uncrystallised Funds Pension Lump Sum’ or immediately before receiving income from a ‘Flexible Annuity’.
This technical briefing details the rules regarding Flexi-Access Drawdown. There are also technical briefings on the Uncrystallised Funds Pension Lump Sum option and the new death benefit flexibility.