Savers on the verge of retirement could benefit from new plans revealed by the Government.
The changes to the system would allow savers with an unused pension pot of less than £2,000 to take it as a lump sum, rather than making them purchase an income with it, as is currently the case.
This lump sum could help provide people considering retirement with a cash payment towards a deposit on a retirement home.
The changes will come into force in April and will apply only to savers over 60 who have £2,000 or less in a registered pension that is not yet in drawdown.
The plan to allow savers to draw a lump sum from their pension followed an announcement that the government was to investigate new ways for people to best make use of small pension savings.
As of April 6, pension pots of up to £2,000 may be paid as a lump sum to savers aged 60 or over. A saver can have only two such lump sum payments and the rules apply to everyone over 60-years-old, no matter how large or small the value of their total pension savings.