Did you know…..The minimum pension age is due to change on 6 April 2010. Because this might affect you or one of your clients, I wanted to tell you a bit more about it.
The change means that from 6 April 2010, the earliest an individual will be able to take their pension benefits will increase from age 50 to age 55.
In other words, people aged 50 on 5 April 2010, will be able to take their pension benefits, but if they don’t manage to take them by midnight that night they won’t be able to access their pension for up to five years.
This change won’t just affect individuals who want to retire early, it will also affect individuals who may wish to take their 25% tax-free lump sum early but leave the rest invested, perhaps while they continue to work.
Time is running out, but there is still time to take advantage of some excellent tax-planning opportunities before the change occurs. For example, by tapping into an existing pension fund now may enable someone to generate an additional tax free lump sum later.
Remember, though, that tax rules can change and the value of the tax advantages can depend on your personal circumstances.
This can be a complex area and advice would be required strictly on an individual basis. I recommend speaking with an independent financial planner who can offer impartial financial planning advice on this area.
Garry Hale AIFP, Dip PFS
Director of HK Wealth Managers Ltd.
garry.hale@hkwm.co.uk
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