Danby Bloch: Advisers must save clients from themselves

Enable’s Independent financial Advisors of Bishops Stortford agree that, “Advisers should be emphasising to clients just how much the proposed new rules for drawing retirement benefits have made registered pensions easily the most attractive vehicles for long-term savings.” As pointed out by Danby Bloch the editorial director of Taxbriefs Financial Publishing.

In the past most of the objections to investing in registered pensions have stemmed from their inflexibility on the event of death.  The main change that has come into the spotlight this year is that people who reach the age of at least 55 will be able to draw as much or as little as they wish directly from their pension without having to buy an annuity and regardless of what clients choose, and they will still be able to receive 25 per cent of their pension savings as a tax-free lump sum.

In addition from 6 April 2015, there will be a limited ability for people in drawdown to make contributions into a money purchase pension changing the current situation, where if you start drawing funds directly from their pension, you cannot make any further pension contributions, although the limit on these contributions will be £10,000 a year rather than the full £40,000 annual allowance.

As ever one of the key job for IFA’s like Enable of Bishop’s Stortford is to inform clients about tax implications. The message Danny Bloch says is clear. “Leaving aside the question of their future income needs, they should always take tax and financial advice before deciding how much to draw from their pension. Any drawings above the tax-free lump sum will be subject to income tax as additional income. Whatever they leave in the pension plan is free of tax on any investment income and capital gains.”

If you would like some financial advice why not get in touch with our team of IFA’s.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE