Archived article: This article was correct at the time of publishing. Tax, investments and pension rules can change over time so the information below may not be current.

Financial Planning

Saving for retirement? What the pension changes mean for you

It’s easy to assume that the noise around pension changes is only really relevant for ‘old people’ at or in retirement. How you take an income in retirement might seem a long way off.

However, it’s possible that you could spend a third of your life in retirement, and significant capital is needed to ensure that you can do all that you will want to do.  The sooner a regular investment programme commences the better.

If you would like to know more about planning ahead for retirement, our free Planning for Retirement guide is available for download here

So, what do the changes mean for savers?


We argue that perhaps the most important consequence of the reforms is psychological. A pension should be seen purely as a tax-efficient means of building a pot of money that will be used to support your lifestyle when you reduce or stop working. Pensions are tax efficient because the Government needs to incentivise people through the tax system to look after their future and ultimately not become a burden on the State.

That is what a personal pension has always been. But the complex rules, and the requirement for many years to buy an annuity, together with the iniquitous way that you lose a lifetime’s savings when you die with an annuity (assuming no spouse pension) all result in pensions being unloved.

  • Swap the need to buy an annuity with being able to do what you like with your money and the whole proposition becomes a lot more interesting.


We believe that people will revisit pensions. A sound savings strategy is to build up a number of savings pots: an ISA account, a pension account and possibly a general investment account to use Capital Gains Tax allowances. Significant sums can be accumulated in tax-advantaged portfolios and when the time comes to draw on your funds to support your lifestyle, the withdrawal strategy can be adjusted to ensure continuing tax efficiency. While pension income is subject to Income Tax, ISA withdrawals are tax free.

It is a simple fact that your future quality of life is directly related to the performance of your investments and there really is no difference between an ISA and a pension from an investment perspective. In spite of this, it is not uncommon to find people who are very focused on their ISA investments but seem far less concerned about their pension funds. Invariably, we see pension funds ‘left behind’ with old employers in funds with extremely limited information and visibility that haven’t been reviewed for years. It is always sensible to review existing arrangements to ensure they remain fit for purpose.

In conclusion, we are very positive about the pension rule changes, as much for savers as those at retirement. Hopefully pensions will soon be regarded as what they should be: a long-term investment account that will be used to finance your future lifestyle.

To talk through pension options available to you please call us on 020 7189 2400 or email for more information.

This article originally appeared in The Bigger Picture, the magazine written by our financial planners. To download a copy and read other articles like this one, please click here.


The value of your investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change.

This article does not constitute personal advice. If you are in any doubt as to the suitability of an investment, please contact one of our advisers. 



Behind the scenes at the Treasury


A simple way to consolidate your shares