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Lichfield financial expert flags up pension changes

A Lichfield-based financial expert is warning people to check what effect new pension rules could have on them.

From April 6, 2010, the minimum age for taking a tax free income or lump sum from a personal pension will increase from 50 to 55 years of age.

The legislation creating this change was put in place in 2006 as part of A Day which aimed to simplify the pension rules and has different consequences depending on how a person chooses to take their pension benefits.

It could also have a significant impact upon the retirement plans of the 7,500 Lichfield residents who are aged between 50 and 54.

Kevin Jenkins

Kevin Jenkins

Kevin Jenkins from Lichfield based IFA firm, Key Financial Management explained:

“This rule change effects those people who are currently aged between 50 and 54 and had planned to take their pension before they reached 55. Essentially, they may have to defer their retirement for up to 5 years if they don’t act before April 6, 2010.”

Retirement at earlier ages will still be possible on the grounds of ill-health and for certain occupations. However, for everyone else wanting to receive their personal pension benefits before the age of 55 they will need to ensure that they have started to receive them before midnight on April 5, 2010.

Kevin added:

“People still have ample time to make any necessary changes to their financial plans before the deadline. However, before taking action with regard to personal pensions or any other investments I would recommend for people to obtain independent financial advice rather than seeking advice from an adviser who is tied and can only advise on the products of a limited selection of providers.”

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Founder of LichfieldLive and editor of the site.