Pensions freedom is here if you believe what the media says. From April 2015, there is considerably more pensions freedom as new tax rules simplified the way people access their pensions.
People will be able to draw sums from their pension and will be taxed at marginal income tax rates rather than the current rate of 55% for full withdrawals.
The tax-free lump sum will continue to be available.
If you read articles on “Pension Freedom” then the media would have you believe that “at last now people will be able to take control of the money in their pensions”. But is this really true?
Take a case we have recently reviewed for a new client with five different pension funds.
The pension policies had been started 20 years ago. Like a lot of pension policies they had investment links to only a small range of investment choices that were able to be linked to our client’s pension policies.
During the past 20 years the “financial adviser” had not re-contacted the client.
The pension company had not informed their pension holder that although he had a very restricted range of funds on four of his policies and a slightly larger choice of funds on one of his pension policies, he could have moved to a pension platform with the same company and benefited from around 2,800 funds.
The client was unaware of this and had chosen only two funds and then held them since inception.
So far from “pension freedom”, this pension – like the majority we see – is locked, locked with a combination of ignorance, poorly performing, outdated and restrictive fund choices AND a large measure of indifference from the host pension company.
This “combination lock” often proves highly toxic in terms of fund performance. Fortunately at UnaVida we have the key to unlocking your pension and the right combination of research tools, skill and understanding to obtain better long term pension performance.