Today marks the largest overhaul of the pensions system in almost a century, giving people the freedom to take control of their own pension.
From today, Monday April 6, 300,000 individuals a year with defined contribution pension savings will be able to access them as they wish when they turn 55 – subject to their marginal rate of tax.
This is on the biggest ever changes to how people access their pensions, removing the effective requirement for many to purchase an annuity.
Announced in the Budget in 2014, these changes were driven by the Liberal Democrats, who have overseen a liberal revolution in the British pensions system.
Today also marks the increase in the basic state pension, thanks to the Liberal Democrat proposal for a ‘triple lock guarantee’. The full basic state pension is now £950 per year higher than in 2010 in cash terms.
Liberal Democrats have:
- Introduced a ‘triple lock guarantee’ to increase the state pension by the higher of earnings growth, price inflation or 2.5%.
- Guaranteed 9m people a workplace pension, which their employers and the government pay in to, giving everyone the confidence to save.
- introduced a new simple, single state pension to help people save for a better retirement.
- Built the foundations for a new model of private pension— the defined ambition pension — where the risks and uncertainties are more evenly shared between employer and employee.
- Abolished the default retirement age-making it illegal for people to be sacked simply because they became a pensioner.
- Authored the freedoms announced at the budget to allow people with annuities the freedom to sell on their existing annuity.
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