PRIME Minister David Cameron has spoken directly to the Dorset Echo about new pension changes that come into effect today.
More than 49,000 people in Dorset will be able to take advantage of government moves which will give people more control over their pensions.
The changes were announced in Chancellor George Osborne’s budget last week.
Older residents in Dorset who are close to retirement or still have access to their pension pot will be among the 400,000 people nationally that will benefit from the changes.
Mr Cameron said: “Last week we announced some seismic reforms to our pensions and saving systems – putting savers in charge and saying to people who have worked hard all their lives that the money they have earned is theirs to spend as they wish.
“From today those changes start to take effect so thousands of savers and pensioners in West Dorset will be given control over their own pensions.
“It used to be that people were effectively forced to take out annuities, stuck in that straitjacket and unable to spend their money as they chose.
“All that starts to change today. We are increasing how much of their pension people can withdraw and from next year reducing the tax penalties they face when they do. “This rewards saving and it says to people who have worked hard and saved hard that we trust them to spend their money as they choose.
“It also gives people security and peace of mind for the future.
“And that’s what our long-term economic plan – the plan which is turning Britain around – is all about.”
The changes will:
- Cut the income required to access your pension savings as you want to from £20,000 to £12,000
- Raise the limit on how much you can take out of your pension pot from 120 per cent to 150 per cent of what your pot will pay you a year
- Nearly double the total savings you can take as a tax-free lump sum to £30,000
- Increase the size of a pension pot that can be taken as a lump sum from £2,000 to £10,000 – regardless of how wealthy you are