Other than being Easter Monday, next Monday is so-called “pension freedom day” the day from which those with UK pensions are being given unprecedented access to their retirement savings.
The future will be the real judge of whether the initiative is a good one or not, but in the meantime we thought it would be a good time to refresh your memory on what the changes actually mean.
From 6 April 2015 anyone with a UK pension and who is over the age of 55 will be able to access their entire pension in whichever way they choose.
There are of course some considerations to bear in mind as, although you will be able to access your pension cash much more freely, you will still have to pay tax on any withdrawals.
Under the new rules, you could decide to take your entire pension as a cash lump sum. But if you do this only the first 25% will be tax free, with the remaining 75% taxed at your highest marginal rate of tax.
You are also free to decide how much and how often you would like to receive payments from your pension.
Before you reach the age of 75, or before what is known as a benefit crystallisation event (i.e. when you begin to take benefits), you will be able to take lump sums out of your pension each year, with the first 25% tax free.
After age 75, or a benefit crystallisation event, you will be taxed on each withdrawal at your highest marginal rate as you withdraw the remaining 75%.
The most important thing to remember is that the new pension flexibility rules mean you can decide how much and how often you would like to withdraw cash, but that it is still subject to income tax.
The rules also mean you will have more choice in how you use your money to support your retirement. For example, you could invest in a buy-to-let property or even start a new business venture.
In the coming days we will be publishing a free guide which will clearly explain all the options available to expats with UK pensions assets so look out for further information soon.
About Simon Danaher
Simon Danaher previously worked for AES International, in marketing and communications.