Private Pension Freedoms Explained

Private Pension Freedoms Explained

The pension freedoms announced by George Osborne back in 2015 came into practice at the start of the 2015/16 tax year. These radical reforms apply to defined contribution pensions planning, to give retirees the choice over how they use their pension pot.

Steve Webb, then Pensions Minister, famously said: “If people do want to get a Lamborghini and end up on the state pension… that is their choice.” Acumen Financial Partnership supports your pension choices, but is here to give you the best quality UK private pension advice, carefully tailored specifically for your situation to ensure that you can enjoy the best possible retirement.

Here at Acumen, we are proud to call ourselves experts in pension freedoms. Our helpful and knowledgeable team is on hand to answer any questions you may have and can offer tailor-made pension advice. Why not read our handy Pension Advice FAQ page to learn more about pensions and the pension freedoms?

Trust Acumen for private pension advice that aligns with your aspirations. Within these pages, we provide a comprehensive understanding of pension freedoms, encompassing: 

  • What did pensions look like before the pension freedoms?
  • What pension reforms were introduced in 2015?
  • What are the pension freedom rule changes?
  • How our team of expert Independent Financial Advisers can help

What did pensions look like before the pension freedoms?

Examine the intricacies of pension planning, guided by Acumen Financial’s expertise. Amid the pension freedoms, certain aspects remain steadfast. A tax-free 25% cash lump sum endures as a cornerstone, while 55 remains the earliest withdrawal age from your private pension plan.

Pre-freedom, stringent rules governed fund utilisation. ‘Capped drawdown’ was one avenue, imposing withdrawal limits mirroring its ‘capped’ label. Alternatively, annuities surrendered control for a fixed income, hindering adaptation. ‘Trivial pensions,’ smaller pots, permitted full withdrawal at 25% tax-free, with the remainder taxed per income rates, available at age 60+ and total pensions below £18,000.

Count on Acumen Financial’s private pension advice for nuanced insights. Navigate pension planning intricacies, optimising your strategy in this new terrain.

Navigating the intricate landscape of financial planning can be a challenging endeavour and demands expertise. Secure a prosperous future through private financial planning. Our adept team of financial advisors and estate planning consultants at Acumen are poised to guide you. We craft personalised strategies, fostering transparent and robust client relationships. Your dedicated advisor delves into your financial position, taking the time to understand your goals and current situation. Armed with insights from your financial history, existing plans, and economic standing, we collaboratively devise an effective blueprint. Our skilled team makes sure you understand and feel confident about how the plan will be carried out.

Due to the complex way in which pensions now operate, it has become more important than ever to seek out tailored pension advice from an Independent Financial Adviser, like Acumen. Why not contact one of our team for expert private pension advice, or read our handy guide on how to prepare for your pension and retirement?

I would confidently recommend Acumen Financial as a professional and expert partner to anyone looking to make important decisions in the complex realm of pensions investments.

K. French, Warrington

What pension planning freedoms rules were introduced in 2015?

With the introduction of the UK pension planning reforms came major changes to the way people could spend their pension fund. Here at Acumen Financial, we have the knowledge and expertise to help you understand the implications of the pension freedoms reforms. Read on to find out more about the types of pension freedoms you can benefit from, and to find out more about how our expert team can help you with independent pension advice.

Our mission goes beyond conventional guidance. We delve deep into the complexities of the private pension ecosystem, unveiling personalised routes for your financial journey. The reforms have introduced a realm of possibilities, and we’re dedicated to maximising your benefits through effective pension planning. Why not take a look at our financial advice success stories to discover more about other customers’ experiences, and how our services can aid your pension scheme.

What are the pension freedom rule changes?

As a result of the introduction of pension freedom rules, there are three major changes to how you can withdraw and spend your pension fund.

Lump-sum withdrawals

One of the most controversial and talked about elements of the pension reforms is the ability to withdraw some, or all, of your pension as a lump sum. Once again, 25% is tax-free, but the remainder won’t be. Here at Acumen Financial Partnership, we strongly recommend consulting an Independent Financial Adviser (IFA) before embarking on this course of action.

It is imperative that you are fully informed and have considered the long-term implications for your retirement funds and subsequent living standards – as well as the possible tax bill if you decide to withdraw your pension funds fully or in part.

Flexible drawdowns

As a result of the pension freedom reforms, flexible drawdown gives you the option to put some, or all, of your pension fund into an investment fund. This allows you to take out any amount, over as long, or short, a period of time as you want, provided you are happy to pay the tax on it. You still have the 25% tax-free element within this option.

Death benefits

The UK pension freedoms also introduced new rules for death benefits. Regardless of whether you choose a flexible drawdown or a lump sum, your remaining private pension funds can be passed down to the next generation. You can even leave a tax-free income, but only if you die before the age of 75. After 75, the funds are taxed at the marginal rates of income tax.

Do private pension freedoms apply to all types of pensions?

The pension freedoms only really focus on private pensions for which either you, or you and your employer, have saved up a pot of cash for retirement. These are generally referred to as a ‘defined contribution’ or ‘money purchase pension’. This means that the pension freedoms do not apply to state pensions, or any pension, in which you will be paid a proportion of your final salary. This type of pension is referred to as a ‘defined benefit pension’.

Expert private pension advice from Acumen Financial Partnership

Delve into our informative Pension Advice FAQ section, or contact our team of expert Independent Financial Advisers for clear, tailor-made pension freedom advice. Our team can review your current financial situation and devise retirement and financial planning strategies that will help you get the most out of your retirement.

For more information regarding the pension freedoms, or for tailored pensions advice, contact Acumen today on 0151 520 4353 or email us at

Key Benefits

Our IFAs are extremely knowledgeable about the UK pension freedom reforms and wider pensions landscape. We pride ourselves on taking the time to get to know you and your situation first, before offering tailored pension advice. We will always put your long-term best interests at heart to ensure that you can enjoy a long and comfortable retirement.

The pension freedoms only apply to defined contribution pension pots. Not to be confused with defined benefit pension pots, which are often called ‘financial salary’ pension schemes. As long as you are not already taking your pension, you can transfer your pension fund to a defined contribution pension fund from a defined benefit pension. However, you should discuss this with your IFA before taking any action.

Pension freedoms apply to private pensions in which either you, or your employer, has saved up a pot of cash for your retirements. These are usually referred to as a defined contribution or money purchase pension. Therefore, pension freedoms do not apply to any final salary or state pensions.

In 2015 a range of new rules were introduced to pension freedoms, these included lump-sum withdrawals, the ability to make flexible drawdowns, and the introduction of new rules for death benefits and tax free income if you pass before the age of 75.

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