Pensions reforms April 2015

This April’s Pension reforms have already increased interest in buy to let investments from the over 55’s as they free up their pension pots and look for alternatives to annuities which I have to say in my view are a poor investment.

This is supported by the increased number of enquiries coming into to our office from over 55’s looking to invest in the Exeter buy to let market.  Most of those who contacted me knew some of the challenges, quite a few didn’t, so I would advise anyone looking to enter the buy to let market to seek professional advice first. Buy to let investments are normally a very good investment if put together correctly so potential new comers to the market should not be put off. 

For those of you not aware of the pension changes taking place this April the following is a summary:

The Taxation of Pensions Bill will change the tax rules to allow over 55’s to access their defined contribution pension pots with more flexibility from April 2015.  Under current rules, savers who want to take their pension as a lump sum can take 25% of their pot tax-free and put the remaining 75% in a drawdown account. Any amount withdrawn from the drawdown account is then taxed at the marginal rate of income tax.

From April 2015, there will be the option to take multiple lump sums from a pot without having to open a drawdown account. 25% of each lump sum will be tax-free and the remaining 75% will be taxed at the individual's marginal rate.

You can get further information / guidance from your own tax advisor or by visiting the government website: https://www.gov.uk/government/publications/pension-flexibility-2015

If you have already decided to invest in the buy to let market please come and talk to me for unbiased advice on the best locations and property types in the Exeter area. I can be contacted on 01392 254488 or by email at exetersales@martinco.com