From April, if you are aged 55 and over will be able to access your pension fund to do as you wish with the available cash, whether that is spending it, saving it elsewhere, or investing the money in whichever way you please. You will be able to withdraw the entire pension pot, or take smaller sums as required.
Although this is a relatively straightforward idea as usual, the devil is in the detail and this is an extremely complex area. Indeed, an individual with a pension pot of only £30,000 could face an immediate tax bill of nearly £9,000.
At the start of December the Financial Conduct Authority warned that consumers were at risk of firms who are using the new freedoms to get people to transfer their pensions to achieve “better returns” and that many of the firms involved are unauthorised and “operating illegally”.
It is important that you seek proper advice before taking such action. Make sure that you seek advice from a firm that is regulated and authorised by the Financial Conduct Authority (FCA). It is important to remember that regulated firms are not allowed to cold call, so be wary of anyone calling you to offer advice.