New pension changes to be announced

14 Oct 2014

With details to be set out in parliament, the Treasury is offering savers more freedom over their pension pots.

Current rules allow people over the age of 55 to withdraw 25% of their pension as a tax-free amount. The new changes will mean that those savers can dip into their pension pots whenever they like, and each time 25% will be tax free.

Chancellor George Osborne said: ‘People who have worked hard and saved all their lives should be free to choose what they do with their money, and that freedom is central to our long-term economic plan.

‘From next year they’ll be able to access as much or as little of their defined contribution pensions as they want and pass on their hard-earned pension to their families tax free.

Previous announcements on pensions this year have included flexible access to pension pots for up to 320,000 individuals, and the ability to pass on unused defined contribution funds to a nominated beneficiary upon death, foregoing the 55% tax charge.