While we will have to wait until next April to see if the Chancellor does introduce all the pension freedoms he has promised, those who are 60 years of age or older can take advantage now of what are called the Trivial Pension options. These have been improved with effect from April 2014, enabling an individual with a pension plan with £30,000 or less in it to take all of the money as cash. 25% is tax-free and the balance is added to their existing income and taxed accordingly. The same individual can also take a further 3 pension pots in this same way - as long as there is less than £10,000 in them. So a person with £30,000 in his main pension, and 3 smaller pensions of £10,000 each, could take them all as cash. It is important to understand, however, that the non-tax-free element will be added to the person’s other income for the year so some care needs to be taken so as not to end up paying higher rate tax on some of the money being taken out.
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