What’s happening on “A-Day”?

New pension legislation is coming in on 6th April 2006 (the so-called “A-Day“), but given the confusion that surrounds pensions (hardly surprising, given that the government doesn’t seem to know what it’s doing with them half of the time), what will A-Day mean for us?

The Motley Fool has posted a good round-up, titled A-Day: The Future of Pensions.

Here are the main points:

  • Retirement Age – The minimum age at which you can start taking your private or company pension will be raised from 50 to 55 by April 2010.
  • Annual Contributions – Most people will be able to put more into their pension than they do at the moment.
  • Tax-free lump sums – Everyone will be able to take up to 25% of their pension (up to the Single Lifetime Allowance) as a tax-free lump sum.
  • Pension income – You will no longer have to take an annuity out by the age of 75.

Go and read the Motley Fool article for more detail.

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