The maximum capped drawdown increased from 120 per cent to 150 per cent of the Government Actuarial Department (GAD) rate, while the minimum income requirement for flexible drawdown was reduced from £20,000 to £12,000.
Further changes are also set to be made in 2015, which would see all limits removed in a move that would allow savers to encash their pension fully on retirement, taking the 25 per cent tax-free sum and the rest at standard income tax rates.
It is vital that advisers understand the ramifications of the changes that have already come into force and grasp what options could be available for their clients next year.
This guide covers what advisers need to consider for clients, the pros and cons of the different options and how deals could evolve as a result of chancellor George Osborne’s shocking Budget announcements.
Contributors of content to this guide were: David Fox, sales and marketing director of Dentons; David Trenner, technical director of Intelligent Pensions; Stan Russell, pension expert at Prudential; Claire Trott, head of technical support at Talbot & Muir; Martin Lines, head of business development at Partnership; and Stephen Lowe, group external affairs and customer insight director of Just Retirement.