We have been saying for a while now that we are concerned about the lack of information available for people to explain the tax consequences of taking money out of pensions when the law on this changes in April. This is a really helpful article with a tax calculation table and suggestions on how best to minimise the tax consequences.
Are you tempted under the new, flexible rules to get your hands on your pension savings? First make sure you fully understand the tax implications of withdrawals. From April, you will be able to use your pension like a bank account, with the option to take either the whole lot out at once or small sums at regular intervals. A maxmium of 25pc of your pension can be taken tax-free. You can take it all immediately or the first 25pc of each withdrawal can be tax free. If you take all of your pension savings at once, the remaining 75pc will be taxed at your usual rate of income tax.