There was an almighty hoo-ha when George Osborne introduced pension freedoms. In the biggest change to pensions in a generation, anyone aged 55 and over is now allowed to take their entire pension pot as a lump sum, paying no tax on the first 25 per cent and the rest taxed as if it were a salary at their income tax rate.
I was among the naysayers and one of those who thought the then Chancellor was absolutely bananas for implementing the new rules. The temptation to blow the lot on a round-the-world cruise or a fancy car must be overwhelming, and falling back on the State in later years will be no picnic.
But among all the fanfare surrounding pension freedoms, the long-held ability to take a quarter of your pension as a tax-free lump sum – and what to do with it once you’ve got it – has been largely overlooked.

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