News updates

27 May 2015

Hot topic

New DC pension freedoms – watch and learn

Since April 2015, members of defined contribution (DC) schemes have greater choice about how they can take their benefits when they are old enough to do so. A video is now available to help you understand the different options.
 


 

If you have any Additional Voluntary Contributions in BRASS and AVC Extra, or if you’re part of the Industry-Wide Defined Contribution Section, the new pension freedoms may apply to you.
 

Before 6 April 2015, if you had defined contribution benefits, you could take up to 25 per cent of your funds tax free and typically needed to purchase an annuity from an insurance company with the remaining funds. This would then provide you with an income for life.
 

Now, you can take up to 25 per cent of your funds tax free and have different options about how to use to remaining funds. You could:
 

  • buy an annuity

 

  • withdraw all of your benefits

 

  • take part of your benefits as income and leave the rest invested (known as drawdown); or

 

  • leave the funds invested and pass them to your chosen beneficiary when you die

 

Income from all of these options is subject to tax.
 
Drawdown is not currently offered within the RPS, but you may be able to transfer your benefits to another provider to take advantage of this option.
 

The government has recently launched a new service, known as Pension Wise, to offer guidance on the various choices. You can visit the Pension Wise website at www.pensionwise.gov.uk

 
 

Video courtesy of Quiet​room.

 


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