A-Day is the date when the new pensions simplification legislation will be implemented in Britain. Pension regulation will literally change overnight, with all existing pension rules changing from 6 April 2006.

April 6 2006 is a date you should remember and keep in mind. On this day, Britain's pension system will undergo its most radical overhaul of the past 50 years.

A changing pensions landscape
Over the years, new pensions have been introduced and Britain currently has eight different sets of rules governing pensions. This makes the existing system complicated and unwieldy. The first report of the Pensions Commission (the 2004 Turner Report) on pensions highlighted the need for a drastic reappraisal of pensions and recommended three options; work longer, save more or increase the state pension.
In the same year, the Government passed both The Finance Act and The Pensions Act. The aim of the legislation is two-fold; to simplify the pensions system and to encourage greater pension investment. The result of this legislation is A-Day.
If you have any concerns or would like to explore what your next step should be please contact us to discuss your position. 

A-Day Glossary 
Alternatively secured pension
This will be available as an alternative to annuity purchase at 75. An Alternatively Secured Pension will operate in a similar manner to an Unsecured Pension but with income reviews held annually. There is no upper age limit for an Alternatively Secured Pension and the arrangement can continue until the death of the original plan-holder. Under A-Day rules, the plan can be set up as a multi-member scheme and at present, there is no restriction on who could be included. An Alternatively Secured Pension may therefore allow you to transfer any residual funds after the death of you and your spouse or dependant. This could provide a route for passing on unused pension funds, which could help another generation provide for their own retirement. However, the Revenue has indicated that there may be some inheritance tax implications. We're still waiting for further details and will update this section when they are available.

Annual Allowance
The Annual Allowance is the maximum amount of pension contributions made by an individual that can benefit from tax relief in the tax year.

Crystallisation
This is simply the new term for when you draw your pension. Under the Finance Act of 2004, the Revenue has defined a number of 'crystallisation' events. These events include drawing all or part of your pension arrangements and if death occurs before pension benefits have been taken. When benefits are crystallised, they must be tested against the Lifetime Allowance.

Enhanced Protection
This is a method of protecting both pension benefits built up before A-Day and any growth in these benefits post A-Day. Enhanced protection is available for any value of funds or pension rights. The registration period will run from 6 April 2006 to 5 April 2009.

Primary Protection
This is a method of protecting pension benefits built up before A-Day from a future tax recovery charge on that part of the fund above the Lifetime Allowance.
Primary protection is only available for funds or pension rights in excess of £1.5m on A-Day. The registration period will run from 6 April 2006 to 5 April 2009.

Recovery charge
This is the term given to the tax payable on any amount over the Lifetime Allowance when benefits are crystallised. The scale of this charge (25% if the excess is taken as taxable income and 55% if taken as cash) is designed to take back the benefits of tax relief and growth on the part of the fund in 'excess'.

Transitional protection
These are measures introduced as part of the A-Day changes to enable individuals with significant (or with the expectation of significant) pension benefits to avoid a potential recovery tax charge by registering for either Primary or Enhanced Protection. It also includes the protection of pre A-Day cash rights of greater than 25% in some contracts.

Unsecured pension 
This is the A-Day term for what is essentially Income Drawdown but there are key differences. There is no requirement to draw any income, The fund will also be able to enjoy the post A-Day investment freedom and income reviews will be held every five years.