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UK pension changes cause massive disruption


In a series of widespread UK pension changes the UK government has changed the landscape for UK pension holders, the most important of these are:

  • The UK government have now stopped public sector pensions (bar local government) from being transferred out of the UK
  • Private defined benefit pensions escaped the same fate after much debate, they could easily be stopped in the future
  • All other schemes can now be accessed at 55, however there are huge tax consequences


The 2014 budget and subsequent amendments set out the most radical UK pension changes ever which fully came into effect on 6 April 2015. These UK pension changes have affected almost every private or public sector UK pension.

Unfunded public sector pensions were most hard hit

The most drastically affected schemes under the UK pension changes are unfunded public sector pension schemes, these are:

  1. NHS pensions
  2. Teachers pensions
  3. Armed Forces pensions
  4. Civil Service pensions
  5. Firefighters pensions
  6. Police pensions

The schemes listed above were permanently locked in from 6 April 2015. This means that if you are a member of one of these schemes you lost your statutory right to transfer out of these schemes. Because you can no longer transfer out of these schemes you need to receive them as a pension out of the UK, unfortunately, this can mean that you pay more tax than might be necessary.

Originally it was proposed that private final salary schemes would be locked as well… while they are not currently they could be in the future

When the first draft of the legislation came out all final salary and defined benefit schemes in the UK were going to be locked in. The initial thinking behind this was to protect the stability of the source the Governments largest bond purchasers – large final salary scheme pension schemes. After much debate the legislation was scaled back to only deal with the unfunded public sector schemes defined above.
However, with the UK economy still not out of recession it is foreseeable that the legislation could again easily be amended to include these schemes. Given the swiftness with which the last set of legislation was introduced it would be prudent for anyone that is holding a final salary pension to review their options.

All other UK pensions are about to get ultimate benefit flexibility…but at a price

The second most radical UK pension change is that members of defined contribution pension schemes and funded defined benefit schemes will be able to access their entire pension fund from age 55 and pay tax at their marginal rate on 75% of the withdrawal (with the other 25% being treated as the tax free pension commencement lump sum).

Other UK pension changes that took effect 27 March 2014

  1. The trivial commutation limit increases from £18,000 to £30,000.
  2. The maximum income permitted under capped drawdown increases to 150% of the GAD rate.
  3. The minimum income threshold for flexible drawdown to £12,000 from £20,000.
  4. The maximum size of a small pension pot which can be taken as a lump sum, regardless of total pension wealth is increased from £2,000 to £10,000, and the number of personal pots that can be taken under these rules will be increased from two to three.

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very stress free

Thank you Cambel for your help and guidance throughout this process in getting my pension transferred (very stress free for me). It is greatly appreciated and I would certainly recommend you and Charter Square to others who are interested in transferring their pension.

David R, New Zealand

You guys rock!

I just wanted to say a great big thank you to you and your team. You are all totally awesome. I received a cheque yesterday from the Prudential to apologise for the ‘recent inconvenience’ that I had experienced. Thank you for doing this for me. You guys rock!

Noelle B, New Zealand

professional, insightful

Charter Square were professional, insightful and a pleasure to work with. They rose to the challenge of consolidating my overseas pensions and bringing them home with minimum fuss for me and maximum effort on their part.

Jens H, New Zealand

thorough, professional and prompt

Very thorough, professional and prompt service from the team at Charter Square. Thanks for making the bewildering world of pension transfers super simple.

Jules T, New Zealand

Best party to deal with

Thank you kindly for keeping in touch with me. For now, I will not be moving my pension. I will however be keeping your details and referring back to you when I wish to pursue. You by far are the best party to deal with, no nonsense, professional and in my opinion genuine. I do sincerely thank you for your advice to date.

GE, New Zealand


Securing the freedom to use savings that are actually ours to work with has been stressful in the extreme. While I never planned on giving up there were many times when the current (UK) holder made the whole process seem well beyond my determination and ability. It’s easy to look at the 36 month history of this claim with the benefit of hindsight, but the conclusion is that employing Charter Square in the first instance would have been wise had I been able to anticipate the red-tape that appears to have been deliberately created to stall access.

CP, Auckland
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