Article date: 29 September 2014
Aviva’s Head of Policy, John Lawson, said:
UK consumers will have even more choice in how they use their pension savings with the ability to pass on their savings tax free to their family and friends.
The new rules will provide a way of enabling consumers to plan for and pass on their pension savings, without penalty.
However, with the new pension freedoms coming into effect from April next year, people need to think carefully about their retirement choices, and inheritance is only one of the factors that should be taken into consideration.
Savers should consider how much of their savings will cover their core retirement living costs for the remainder of their lives. In these cases having a guaranteed income, as offered by an annuity, may be the best option. For most people with average pension pots, these changes will not be so relevant.
For savers with bigger pots, a mix of products may enable them to keep some of their money in their pension scheme, which benefit from the new rules and can be passed on to their loved ones with no tax.