Trick or Treat?

That is the question I am asking with regards to the pension reforms that are allowing people to take their pension pots early.

Treat 1 – Yes the government have come knocking on the door of their voting public offering them huge sums of (their own) money from pension pots built up over a working lifetime to help stimulate the economy now – even suggesting that you may be at long last be able go out and afford that Ferrari you always dreamed of.

Treat 2 – Fantastic succession possibilities now available (if set up correctly) – pension pots still in existence shouldn’t disappear on death along with the annuity and the even tax free payments from fund depending on age at death can be passed on to families.

Trick 1 – Huge tax bills may be due with any of the pension money taken over and above the Tax Free Lump sum of 25% of the fund. This could be taxed at 40% or 45% as all the cash taken is classed as earned income. Huge income injection for the government.

Trick 2 – For people with large pension pots of £1million+ there is the Lifetime allowance reduction that could mean a further tax required to be paid of 55% – a massive tax income for the government that seems to have had little publicity.

Trick 3 – What is going to happen in the future – If people are using the income designed for retirement earlier what about income levels later in life?

Trick 4 – Ex Pats Spain – This is very tricky as people will fall in between the tax rules that apply in Spain and the guidelines and rules set in stone by the HMRC. There is legislation set especially for QROPS (Qualified Overseas Pension Schemes) but it is very important that advice is taken from a Qualified Financial Adviser.

There are few more treats but many more tricks that have popped up with the new legislation but there is no need to feel scared!

I have been a fully Qualified Financial Adviser for 28 years and also understand the needs of ex-pats and the rules that apply to ex British living and retiring in Spain so if you need to talk through your own situation then please feel free to call me and we can have a no obligation discussion about the best way forward for your retirement

In today’s financial climate it is essential you do everything you can to make sure your money is safe and secure and what you want to transpire in the future has the best chance of happening.

If you need advice or if have any questions regarding the above you can contact me on 657 684 094 or email

The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.

Blacktower Financial Management Ltd is licensed by the UK by the Financial Conduct Authority and is registered with both the DGS and CNMV. Blacktower Financial Management (Int) Ltd is licensed in Gibraltar by the Financial Services Commission (FSC) Licence No: 00805B and registered with the DGS in Spain.