Pensions - Articles - NFU Mutual comment on flexible pension withdrawal

 Commenting on flexible withdrawals from pensions, Sean McCann, Chartered Financial Planner at NFU Mutual, said:

 “From April 2015, people who wish to flexibly access their pensions will be made ‘aware of the tax consequences’. However, we still don’t know how tax will be collected.

 “If the taxman wants all the money up front, basic-rate taxpayers may find that 40 or even 45 per cent income tax on some or all of their withdrawals. The process to claim any overpaid amounts back could take months.

 “Alternatively, if only 20 per cent tax is deducted at source, people may be expected to work out the tax they owe and keep enough money aside to pay the subsequent tax bill. Either way, many people will find they need to complete a tax return, some for the first time.

 “Managing finances in retirement doesn’t appeal to everyone. Professional financial advice will become increasingly important for people who want more control over their nest eggs but don’t want to pay any more tax than they need to. There is still a place in the market for a guaranteed income, which is where annuities will continue to play their part.”