The Queen has confirmed legislation announced in the 2014 Budget to offer greater flexibility to pensions in the way retiring defined contribution (DC) pension members can take their savings.
The Pensions Tax Bill will remove previous restrictions to the way individuals can access their DC pension savings, and allow them to access their savings subject to their marginal tax rate.
From April 2015, employees in a DC scheme will be able to take their pension wealth as a lump sum, drawdown, or an annuity.
The bill will also introduce anti-avoidance provisions to prevent individuals fromtaking advantage of the new flexible arrangements for tax avoidance purposes.
Prime minister David Cameron said: “The reforms we plan will be the biggest transformation in our pensions system since its inception, and will give people both freedom and security in retirement.
“By no longer forcing people to buy an annuity, we are giving them total control over the money they have put aside over their lifetime and greater financial security in their old age.
“It’s all part of our wider mission to put power back in the hands of the people who have worked hard, trusting them to run their own lives.”
