From April 2015 the new pension rules will take effect and we will know more about what we can and cannot do. We now know that you will be allowed to invest up to £10,000 in a pension in a tax year once you are in drawdown as opposed to taking an annuity or not having taken anything from a pension where the amount will remain £40,000 p. a. Whether this opens up planning opportunities has yet to be seen as you retain the £40,000 limit if you buy an annuity for life.

From April you will be able to take any amount form your pension with 25% tax free and the rest taxed as earned income. As long as you are over age 55. This may offer planning opportunities, with planning in certain circumstances all the income can be tax free.

If you have defined benefit pension income, that is a pension based on your final salary and the number of years in employment will you really want to use your defined contribution Pensions. These may be better left until last as they will not be subject to Inheritance Tax, IHT, on death.
The issue here is who you leave your death benefit too and that is the subject for another time. Most people leave it to their spouse which defeats the purpose of avoiding IHT.

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