On 9th December The HM Treasury announced its judgement on the rules for retirement income with effect from 6 April 2011. Here at Retirement Solutions we would like to point out the rules for those clients that are already in income drawdown and how they will be affected.
Existing arrangements will come under the new regime with effect from the 6th April 2011.
The impact of the new ‘Capped Drawdown’ limits will affect existing arrangements in different ways depending upon when 75th birthday falls, so if it falls:
On or after the 6th April 2011, the new limits apply from the start of their next reference period to begin on or after that date;
Before 6th April 2011, from the start of the drawdown pension year in which the 6th April falls. Except for those who Between 22nd June 2010 and 5th April 2011, the changes will have effect from the start of their next drawdown pension year to begin on or after 6th April 2011.
What you cannot do!
• Have a flexible income drawdown and continue to get tax relief on pension contributions.
• Claim tax relief on contributions made after your 75th Birthday.
Source: The Retirement Partnership
We urge all those customers that are in income drawdown to read up on the new rules and where necessary contact us for a review.
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