Millions of people will receive free advice on their pensions the government has confirmed.
The news was announced by George Osborne and follows the government’s consultation on how best to deliver the radical changes on how people access their pensions announced in the Budget. In total up to 18 million people could benefit from these changes.
From April 2015 300,000 individuals a year with defined contribution pension savings will be able to access them as they wish when they turn 55 – subject to their marginal rate of tax.
This is the biggest change to how people access their pensions in almost a century, removing the effective requirement for many to purchase an annuity.
The chancellor said its consultation showed the proposals have been ‘overwhelmingly’ well received.
The advice will be offered by independent organisations, although it will not always be face-to-face and could be provided online or through the phone.
The cost of this advice will be paid for by a levy on financial firms.
‘It’s right to support hard working people that have taken the long-term decision to save for their future and I’m pleased that the responses we had to our proposals on making pensions more flexible have been overwhelmingly positive,’ Osborne said.
‘We’re making sure that people have the right support to make their own choice about how best to finance their retirement and I’m pleased to confirm that everyone with defined contribution pension savings reaching pension age will get free and impartial guidance on their range of available choices at retirement.’