This analysis focuses on when benefits can be taken, summarises the main options available and also looks at the restrictions that apply.
An explanation of when emergency rate tax applies and how to get it back.
One of the most popular options is income drawdown. There are two types: capped and flexible drawdown.
Since 6 April 2015 any new drawdown plans must be a flexi-access drawdown plan.
New capped drawdown plans were only available until 6 April 2015. Existing plans can continue as long as the GAD limit is not exceeded.
Sometimes it's possible to exchange all pension benefits for a one-off lump sum.
There is a maximum amount that can be taken from a pension scheme without being subject to a tax charge. This is called the lifetime allowance and fittingly the tax charge is called the lifetime allowance charge.
It is currently possible to protect benefits from a lifetime allowance charge as a result of the lifetime allowance being reduced (which the Government like to do quite often). This protection has the effect of locking the lifetime allowance at a certain rate, meaning the reduction won't apply. However, there are conditions which, if broken, will result in protection being lost.
Once benefits have been taken, it is possible to re-use this money and pay it back into a pension. However, you won't be surprised to hear that there are rules and restrictions in place.