Independent Financial Advisors - IFA Bolton, UK

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Tax Free Cash
Under the old pensions rules some plans, such as certain occupational schemes, allow savers to take more than 25 per cent of their fund as tax-free cash when the time comes to take the benefits. However, others, such as top-up pensions Additional Voluntary Contribution schemes, do not allow any tax-free cash to be taken.

Legislation now allows all pensions policyholders to take 25 per cent tax-free cash on the benefits built up after 6th April 2006, regardless of the kind of scheme it is. (The amount those in occupational schemes will be able to take as tax-free cash may depend on whether the trustees have changed the scheme rules, meaning individuals may need to contact their scheme’s trustees to establish what the situation is).

Permitting all pension policyholders to take 25 per cent tax-free cash levels the playing field between different pensions. This means it will be a good idea to re-consider which pension arrangements are the most attractive to you with the help of one of our expert advisers.
 
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