Make the most of the new pension exit cap

Earlier this year it was revealed that some pension providers were charging fees of up to 10 per cent to withdraw money early as part of the changes to pension freedoms.

These freedoms, which came into effect in April 2015, allow anyone over the age of 55 to withdraw as much as they wanted from their pensions, subject to income tax at each taxpayer’s marginal rate (either 20 per cent for the basic rate, 40 per cent for the higher rate or 45 per cent for the additional rate).

However, on top of this pension providers have been charging a fee for removing the money early, with some hiking their rates up to 10 per cent – a move criticised by the Financial Conduct Authority (FCA).

Following an investigation into these practices the FCA has announced that anyone taking money out of a personal pension from 1 April 2017 cannot be charged more than 1 per cent by their provide, whilst providers who already charge less than 1 per cent will not be allowed to raise their fees.

Those taking out new pension contracts will eventually face no early exit charge at all and workplace pensions will be subject to the same rules, but these will not come into effect until October 2017, according to the Department for Work and Pensions (DWP).

This move will be welcomed by many farmers approaching the end of their career, but it is important to have the right plan in place to make sure you have enough money to enjoy your retirement.

In today’s complicated marketplace, professional and impartial advice is paramount when it comes to finding the best solutions to meet your financial needs.

MT Financial Management is a firm of Chartered Financial Planners that provides independent and unbiased financial planning, investment portfolio management, pension review and trust review services to the clients of Moore Thompson Chartered Accountants and selected professional introducers.

We offer an initial meeting at our cost and with no obligation, so that you can decide whether you wish to use our services before incurring any costs.

We will agree a fixed fee to provide a review of your financial situation, so that our experienced and independent financial advisors can determine whether your financial arrangements are appropriate, and recommend areas that need improvement. Of course, our proposals will be comprehensively explained, so you can make informed decisions about any suggested changes.

All of our advisors are qualified to Chartered Financial Planner status, providing their high levels of technical knowledge and experience on a fixed cost basis.

As our fees are agreed in advance, we are not tied to promoting particular solutions and can focus on providing the best professional advice.

To find out more about our services, please contact Trevor Wilshire on 01775 717220 or visit www.mtfinman.co.uk.

Posted in ARA News.