Before you consider is it worth to transfer your pension or if you consider only changing of your pension scheme, it is good to know some basic facts about the pension reform in UK.
First three essentials are:
- What is the aim of the pension reform in UK?
- Who will be directly affected by the reform?
- When the new regulations will come into force?
This basic information may help you to make better and informed decisions. It can even save you a lot of time and money, especially if you are an expatriate.
The main aspects of the new pension reform in UK are related to the way people may accesses their pensions. The pension reform is widely recognised as the most fundamental change to be done in almost a century. This raises the question “How these new rules may impact people with existing pensions and those who save money hard to ensure their future pensions?”.
If you want to understand the pension reform and how it may change your short-term and long-term personal plans, the first thing which is advisable to do is to understand what is to be altered. Try to ignore sophisticated explanations and to comprehend which the major changes are in a simple way, as it is explained below.
The aim of the pension reform is to grant larger choice and flexibility to the beneficiaries of the pension system in the way they can utilise their pensions. The new set of laws will treat the issue how people can access their pension.
Almost all new rules will be related to the people with so called “defined contribution” pensions. These are people whose pension contributions are invested by a pension provider. When they retire, the individuals with defined contribution pensions receive a pension, which depends on how much they paid/ saved for their pension and what was the profitability of their pre-pension investment.
For the aforementioned category of people the new regulations and changes will come in to force from April 2015.
Which are exactly these new rules will be explained in to the next article, related to the pension and personal planning.