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Rakhi Vasavada
Rakhi Vasavada, Financial Advisor
Category: Finance
Satisfied Customers: 4550
Experience:  Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years
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My husband and I have two pensions coming out next month. One

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My husband and I have two pensions coming out next month. One is for £43,000 and the other for £23,000. We have various options such as a tax free cash lump sum and some annuity each year, but with the new law coming out in April 2016 can we defer these two pensions until then and take the entire amount out in cash even if we have to pay a higher tax bracket?
Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

There are both "yes" and "no" to this. The key here is not to take a hasty decision when you have options just in near future.

Let me try and throw light on this.

YES.. The new laws coming in provides you flexibility to cash out entire pension. It also allows you to defer not taking now and waiting until the changes take effect.

There will be three choices: buy an annuity (a regular income for life); take regular chunks from your pension pot as and when you wish; or take the whole lot in one go.

If you are retiring before next April, you HAVE the FREEDOM to consider whether it is worth waiting until the new pension freedoms arrive. The choice now is between annuities and drawdown.

Annuities are bought from an insurer or via an adviser or broker and give a regular income for life. Drawdown allows you to keep your money invested while taking an income. But the amount of income you take – unlike from next April – can be restricted as a result of HM Revenue & Customs rules governing many drawdown schemes.

Advice is key to ensure no rushed decisions are made when increased flexibility is just around the corner.

To sum up, YES, you can defer taking out partial lump sum until the new law comes in.

I am sure this would help.

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Warm Regards,
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