HMRC Flexible Pension Access

Thousands To Choose Flexible Pension Access.

HM Revenue & Customs (HMRC) has reported that it expects 130,000 people retiring next year will take cash out of their pension pots, under the new flexibility rules.

Under the new rules that were announced by Chancellor George Osborne in his Budget Speech 2014, retirees will be allowed to gain access to their pension pots as they saw fit, meaning they could withdraw all money from their pension from 2015 if they so wish.

The new publication form HMRC said that 400,000 people will be eligible  to take money from their pension pots, although only 130,000 are expected to do so.

HMRC has said that despite the new flexibility rules making pensions more attractive, it has not affected annuity sales. Pensioners will still have the option to purchase an annuity with their pension and two thirds are expected to do so.

Comment

HMRC's figures are "pie in the sky" guesswork.  We will not know until we know the real figures.  Their comment in annuity sales confirms their inaccurate forecasting given that many pension companies including big guns like Standard Life, Just Retirement, LV=, Legal and General and Prudential have announced dramatic falls in some areas of up to 50% in annuity sales.

The new flexibility will nlt affect your option to buy an annuity, but many will take the higher risk approach of flexible pension drawdown.