On 6 April 2006, as a result of a history of complexity and confusion, the Government simplified the rules concerning the future funding of pensions in the UK. The level of contributions you can make, the way they can be invested and how and when you can take benefits were all changed.

What are the key changes in pension rules?

• One set of investment rules now govern all schemes
• Additional options (annuity and drawdown) give you better choices when you retire
• Your payments into schemes will have an annual allowance and tax relief is available up to 100% of relevant earnings up to £215k
• Your tax privileged savings will have a lifetime allowance limit initially set at £1.5m, rising to £1.8m in 2010
• Tax free cash of 25% of your fund will normally be available from your pension plan
• If your funds are small - less than £15k in total - you may be able to take these as a lump sum
• You’re able to access your pension at 55, even if you’re still working

Her Majesty’s Revenue and Customs practices relating to taxation can be complex and subject to change which may not be foreseen. If you don’t understand any pension plan you should contact an Openwork adviser for a full explanation.