The Government will bring in new legislation from 6 April 2016 to allow people who are already receiving income from an annuity to agree with their provider to assign their annuity income to a third party in exchange for a lump sum or an alternative retirement product. Currently, such action would give rise to a 55% charge, but this is to be abolished. This change will allow those who are already in receipt of a pension annuity to access the new flexible pension rules.
Pension Fund Lifetime Allowance Reduced
However, from 6 April 2016 the pension fund lifetime allowance will be reduced from £1.25million to £1million. Transitional protection for pension rights already over £1 million will be introduced alongside this reduction to ensure the change is not retrospective. The lifetime allowance will then be indexed annually in line with CPI from 6 April 2018.
April 10th, 2015