Pensions Freedom?

Pensions Freedom?

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this pension – like the majority we see – is locked, locked with a combination of ignorance, poorly performing, outdated and restrictive fund choices AND a large measure of indifference from the host pension company.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.

We provide our own Pensions Freedom Guide. Alternatively, you are welcome to contact us.

Registered in England and Wales. Registered Number 5553273.
Registered Address: 8f Millars Brook, Molly Millars Lane, Wokingham, Berkshire, RG41 2AD.

A pension is a long-term investment that typically cannot be accessed until age 55 (57 from April 2028). The level of pension benefits offered could change depending on the value of your investments (and any income they may generate).

The interest rates in effect at the time you begin receiving benefits may also have an impact on your pension income. The tax consequences of pension withdrawals will depend on your unique situation. In later Finance Acts, tax rates, tax bases, and tax relief may change.

The opinions expressed by Ray Best are meant to inform and educate. Before making any investment decisions always take advice that is pertinent to your investment personality and financial situation.

You are aware that past performance will not necessarily be repeated in the future, but you should be aware that persistent poor performance invariably will.

The value of an investment and the income from it could go down as well as up.

The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

UnaVida Wealth Management Ltd. is directly authorised and regulated by the Financial Conduct Authority (440577).

The guidance in this website is primarily aimed at a UK audience and is subject to regulation by the Financial Conduct Authority (FCA).

The Financial Conduct Authority does not regulate tax planning, estate planning, or wills and any form of legal documentation.