Study reveals ignorance of state pension reforms

Study reveals ignorance of state pension reforms
Professional Adviser | 18 Nov 2014 | 08:03
Author: Professional Adviser

Almost half of people are unaware how changes to the state pension will affect them with just over 500 days to go until historic reforms are introduced, research suggests.

Chancellor abolishes 55% tax on pension funds at death

People with defined contribution pension savings will no longer have to worry about their pension savings being taxed at 55% on death.

The Chancellor today (Monday 29 September) announced that from April 2015 individuals will have the freedom to pass on their unused defined contribution pension to any nominated beneficiary when they die, rather than paying the 55% tax charge which currently applies to pensions passed on at death.

Pension reforms: eight things you should know

We’re completely overhauling the system so you can take your pension how you like
In order to create greater choice and flexibility for people who have saved hard for their pension, we announced at Budget 2014 a series of changes to how people access their pension.
From April 2015, no matter how much you decide to take out from your pension after retirement, withdrawals from your pension will be treated as income; the amount of tax you will pay on what you withdraw will depend on the amount of other income you have in that year. This is instead of being taxed 55% for full withdrawal, as it has been previously.