Pension flexibility - What next?

United Kingdom

In March this year, the Government announced that it intended to make fundamental changes to the defined contribution (DC) landscape from April 2015. Members will be able to take the whole of their DC benefits as a cash lump sum rather than accessing it through an annuity or income drawdown. 25% of the lump sum will be tax free (in line with current rules) and the remainder will be taxed at the member’s marginal rate of income tax. The Government has now provided more detail about how this and other proposed changes will work.