Income Drawdown Changes
Go to: Previous Article Next Article
Governments are endlessly changing policies and one of the most recent changes to policy in the United Kingdom directly affects those pensioners that choose to use income drawdown as part of their pension pay out. The changes are so big in fact that in recent months large private pension companies have been urging their clients to act fast and ensure they have their income drawdown set up before drastic cutbacks take place.
The Government made a series of changes to the income drawdown scheme in April, one of which being a number of tax and threshold reductions. These threshold reductions included a decrease in the amount that pensioners are allowed to draw on for income drawdown from their pension pot. Whereas before April they were allowed to draw up to 120 per cent of the offered rate, they will now only be allowed to draw 100 per cent which can see a decrease of up to 20 per cent of their total pension pot being available to them.
The proposed introduction of a unisex payment plan is also set to see male pension pay outs take a hit. Under the present scheme men tend to be paid more as they are high earners throughout their life, if their pay outs were to be brought in line with women's then many of them could stand to lose up ten per cent of their current pay outs.
Up until April 6 pensioners were able to lock in their income drawdown plans and continue to receive the 120 per cent income rate, so many companies were urging their clients to lock in their income drawdown payments so that they could continue to receive this rate even after the new legislation came in.
These are not the only cut backs to the pension program, there have also been a series of changes to the pension table which is used to determine the pension pay out amount in addition to an increase in the death tax for any lump sums paid onto beneficiaries, this will now be set at 55 per cent.
Article Source: Articlelogy.com
- Credit Cards A big selection of Cards in all flavors: Bad Credit Cards, Secured Cards, Prepaid Cards, Canada Cards, Low Interest Cards -
Word Count: 349
Reduce Your Debts Without Bankruptcy. See How Much You Can Save. Free Debt Analysis
