If you are over 60 and retired, you may be receiving a monthly pension payment from an Account Based pension fund. As both the earnings in the fund and the payments made are tax free, the government mandates that a minimum amount needs to be withdrawn each year.
However, due to the impact that Covid 19 has had on some businesses, their profits and dividends paid, the government has temporarily cut the minimum pension payments that are required to be paid by half. This increased flexibility is a positive move as it now allows clients who are drawing more than they require to leave the additional funds in the tax-free environment.
Pension payments are normally re-set each year in July and are based on the balance on 1 July. So if you currently have your pension payments set as ‘minimum’ (but don’t really require drawing down this amount), there may be an opportunity to reduce payments and leave more in the fund.
Feel free to call to schedule a meeting to discuss.