Treasury overhauls pension withdrawal rules

The Treasury is to give savers more freedom over how they take a tax-free lump sum from their pension pot.

Under current rules people can take a quarter of their pension pot in a tax-fee lump sum after the age of 55. Rules also stipulate the money must be taken within 18 months of the member becoming eligible for their pension income, meaning the money had to be taken as a lump sum either six months before or 12 months after commencement of the income. However, Chancellor George Osborne's pension reforms now mean savers will be able to access their funds when they choose, with each withdrawal coming with a 25% tax-free element. Hargreaves Lansdown head of pensions research Tom McPhail s...