Pension Flexibility: Regulators Release Guidance Ahead Of April Changes

The pensions industry is gearing up for yet more radical changes to its landscape from 6 April, which is when the remainder of the widely-reported pension flexibility reforms come into force.

The reforms principally apply to pension schemes offering "defined contribution" (DC) benefits. They will, according to HM Treasury, give members greater freedom and choice in the manner in which they can access their benefits.

Until now, the conventional option for taking DC pension benefits has been to buy an annuity. From 6 April, the main options that members can have for taking their DC pension benefits (and categorised as "Flexible Benefits" within the legislation) are as follows:

• A full withdrawal of the fund benefits (in one go as cash), taking up to 25% of the pot as a tax-free lump sum and having the rest taxed at the member's applicable income tax rate;