The new Pension Freedom rules allow anyone over age 55 the ability to cash in their pension fund.

If you have cashed in your pension, and now regret the decision, you cannot subsequently go back to your provider and ask them to reinstate it. The rules do not allow it.

You will also find that the normal £40,000 annual allowance for further pension contributions is no longer available.

From 05 April 2015 you can only contribute £10,000 per annum into a pension if you have started taking benefits.

So what are your options?

Individual Savings Accounts (ISA’s) offer a range of tax advantages. While there is no tax relief available on ISA contributions, unlike with pensions any withdrawals from an ISA are tax-free.

The current ISA allowance of £15,240, offers you the investor the ability to move pension money back into a tax-advantaged fund quicker than reinvesting into a pension.

Another option is to look at the tax position of your spouse, and whether there may be greater scope to use their pension or ISA allowances. Assets can be transferred between spouses without any tax penalty, and if they have a greater ability to make pension contributions then it may make sense to look at this option.

If you are prepared to take more risk with your money, you could look at other investment options, such as Enterprise Investment Schemes (EIS’s) and Venture Capital Trusts (VCT’s).

The underlying investments are generally higher risk than most pension funds, investing in smaller companies and early stage companies, but there are very generous tax breaks for investors, 30 per cent tax relief is available to investors, to encourage investment into Britain’s enterprise economy.

For bespoke pension advice contact Credencis.

We are situated near to Derby and Nottingham and visit clients nationwide.


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