As of the 6th April this year changes have been made to the way people can access the funds from their pension. But what does this mean for you? Today we’re going to guide you through how the changes in pension could potentially affect you, both in terms of what you can do, and arguably what you should do!


The Changes

In simple terms the new rules allow you to:

  • Take away a single tax free lump sum – You may prefer to have the money in your account or to invest it elsewhere.
  • Take away a number of lump sums – For example you may want to get a certain amount per year after you have calculated living expenses, holidays etc.
  • Set up a drawdown that allows you to receive a regular income – While a bit more restricted you may prefer this option if you want to spread out the amount you take from your pension over time.

While presented like this it can seem simple (and in terms of choosing what you want to do it is). However, the reality is more complex in terms of how you would get the money and the best ways of making sure you get the most from your money. Inevitably faced with more options and more flexibility it can also mean that people have a range of choices and often this can seem overwhelming. There is always the fear that a short-term money grab could result in problems in the future.

However, equally you may decide with that short-term lump sum to invest that money elsewhere and it could potentially result in an even better return on your pension money.  With any investment it is important to emphasise they can go down as well as up which is why we would recommend spreading the risk as much as possible in order to give yourself the best chance of a return on your investment.


Getting advice

We believe that this changes offer a great opportunity for people. It is natural to be afraid that these new freedoms could potentially result in people blowing their pension. However, most people are also sensible enough to know that this money is there to look after them in retirement. With more people living longer this will only become more important over time.

This is why at Larcomes we believe in giving people the right advice to help them make the right choices. Our advisers have the qualifications and experience to go over all the options available to you and to allow you to consider what is most appropriate for your particular needs. Everyone is different and what may be the right advice for one person’s financial circumstances might not be right for another.

If you would like to know more about the changes to the pension rules and help choosing a pensions package that is right for your particular needs please contact us today and we will happy to help!