New transitional rules were put in place from 22 April 2010 increasing the top end age to 77 from age 75. The bottom end range remains at age 55.
Income drawdown allows you to defer the purchase of an annuity and keep your fund invested. The maximum income that may be drawn is 120 per cent of the pension that could have been purchased, calculated using Government Actuary rates. There is no minimum income requirement and if you so wish you can take zero income. Either an annuity or Alternatively Secured Pension (ASP) must be selected at age 75.
Q: How could the new retirement rule changes affect me?
A: The government is currently consulting on changes to the rules on having to take a pension income by age 75. This may be important to you if you’re coming up to age 75, or if you’re deciding between an annuity or Income Drawdown. Under the proposals, there will no longer be a requirement to take pension benefits by a specific age. Tax-free cash will still normally only be available when the pension fund is made available to provide an income, either by entering Income Drawdown or by setting up an annuity. Pension benefits are likely to be tested against the Lifetime Allowance at age 75.