From 6th April 2015, there will be a new rule that will affect pensioners. A survey by pension providers by Money reveals that the pensioners may be forced to preserve a sizable minimum balance, would have to post a signed request for each withdrawal or it may also be restricted to only having as few as two withdrawals per year.
The pension minister, Steve Webb had stated that when the new rules come into force on in April, people aged over 55 ought to “stay in bed' or “take the grandchildren to the seaside” instead of rustling out to withdraw their money.
Many times in the past, there have been many accusations that pensioners have been using their pension money as a normal bank account and these new rules have been put to make sure people are not going to be misusing this scheme. A Partner at the pensions consultancy Hymans Robertson, Chris Noon states, “Come April, there will be a lot of disappointed people who won't be able to access their pension savings in the way they anticipated”.
Many pension providers have revealed new flexibilities that they will be offering from April. Five providers, Interactive Investors, LV, Scottish Widows, Hargreaves Lansdown and Standard Life are going to allow full leeway on drawdowns; they will allow customers to withdraw around £1000 on the first day, then £50 in the moth after and then a further £81 two days after the £50 withdrawal. However, some have stated that withdrawal will only be paid on a set date once a month.
Chris Noon also adds that although the new rules will be taking place next month, there will not be a limit on fees for drawdown policies.
