There are an increasing number of companies who are not offering the new freedoms of pension choice to those who are eligible (above right) and therefore your only option may be to transfer to a company that does but beware that this could lead to loss of benefits.
Importantly, the rules do not apply to defined benefit (final salary) schemes, public sector pensions, state pensions or annuities, though there may be greater flexibility for annuities in future.
What are my options?
Take the whole fund out as cash in one go. Beware of the tax implications.
Take regular income through income drawdown. You draw directly from the pension fund, which remains invested. Or you can take ad hoc amounts when you need it.
It should be possible to take the 25% tax-free lump sum and take taxable income through income drawdown at a later date. Remember, the lump sum is only tax free in the UK and there is a tax charge in France.
TIP: For those planning to move to France, it is well worth looking at the timing of taking your 25% to reduce the tax payable.
The new rules apply to those aged 55 and over with ‘defined contribution’ schemes. For example, individual or group personal or stakeholder pensions, Self-Invested Personal Pensions (SIPPs), some Additional Voluntary Contribution (AVC) schemes, Executive Pension Plans (EPPs) and Small Self-Administered schemes (SSASs).