In 2006, 6 April marked the start of a new pension tax regime, and last year it heralded the beginning of new basic state pension rules. 6 April 2011 saw the start of another round of major pension tax changes, adding a further layer of complexity to 2006’s ‘simplified’ rules:

• The special annual allowance (SAA) rules came to an end. These had been introduced in April 2009 to limit pension contribution tax relief for high earners.
• The annual allowance was reduced from £255,000 to £50,000 as part of a series of measures to recoup the tax revenue that would otherwise have been lost because of the SAA’s abolition. The annual allowance is likely to stay at £50,000 until at least 2016.
• New ‘carry forward’ rules began, which mean that subject to certain conditions you can bring forward unused annual allowance from the three previous tax years to set against pension contributions greater than your current tax year’s annual allowance. 
• The exemption from the annual allowance rules, which applied if you made contributions in the same tax year as drawing benefits, was withdrawn, making last-minute pension planning based on large one-off contributions potentially much less attractive.
• The effective requirement to purchase an annuity or scheme pension at age 75/77 was withdrawn (77 for members who reach their 75th birthday on or after 22 June 2010). There is now no deadline for annuity purchase and you can, if you wish, never draw benefits.
• The framework for income drawdown – drawing income directly from your pension fund – has been revised. In most instances the future maximum you can draw has been reduced and reviews have become more frequent.
• Flexible drawdown now allows you to draw as much of your fund as you wish, provided you satisfy a minimum income requirement, currently set at £20,000 a tax year.
• The flat tax charge on lump sum death benefits from drawdown funds and annuities has increased from 35% to 55%, although the inheritance tax treatment has been relaxed.
• Alternatively secured pensions, which used to be the only alternative to annuities and scheme pensions from age 75/77, have been scrapped. 

These reforms have rendered redundant some retirement planning techniques which emerged after 2006. However, they have also opened up new opportunities, both in retirement and estate planning. All of this means that a post-6 April review of your pension planning is now a priority.

The value of tax reliefs depends on your individual circumstances. Tax and pensions laws can change. The FSA does not regulate some forms of estate planning.