Refers to the introduction of simplified pension rules on 6 April 2006, such as easier-to-understand annual pension contribution limits.
An income for life provided by an insurance company in exchange for a lump sum.
Additional Voluntary Contributions: extra contributions made by members of company pension schemes.
A facility to take a regular income from a pension fund without buying an annuity.
Open Market Option –
With a money purchase pension (such as a stakeholder or SIPP) the ability to shop around at retirement for the best annuity rates.
Pension credits –
Additional means-tested state benefits for pensioners on low incomes.
Pension sharing –
Also known as pension splitting - an arrangement where pension benefits are divided between spouses on divorce.
Phased retirement –
Gradually turning parts of your pension policy into annuities, leaving the remainder invested until required.
Tax free cash –
The lump sum that can be taken from a pension at retirement in lieu of regular income. From April 6, 2006, the limit for all types of pensions will be 25 per cent of the individual’s fund.
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