I have been quite vocal in my views that the Government ‘pulled the trigger’ a little early in trying to re-rationalise these minimum pension percentages from 1 July 2012 (see my blog post, “Why the 25% reduced minimum pension is not enough in these tough financial times”.
With financial markets going ‘up and down’ like a yo-yo, many retirees that I have been talking with were starting to have concerns that they would need to be dipping into the piggy bank a little more than they would have liked – this would have also included having to sell assets in a market which is volatile but also potentially in a capital loss position for many trustees.
It is somewhat depressing that these reduced pension “temporary” measures have now been in place for the last four (4) years, with next year now making it five.
These measures apply to all accounts-based pensions, that is, allocated pensions, market linked pensions and account based pensions (including transition to retirement). See previous article, “Government finalises minimum pension drawdown relief for self-funded retirees” for further information on how these reduced minimum pensions apply.