LFFC,
Further to your last, the new guidance will aply from April 15 - confirmed. It was decided that reducing the annual allowance from to £10,000 would reduce the risk of people recycling tax-free lump sum and reinvesting it into a new pension to receive fresh tax relief. Poor excuse really, the state wants money in the system sloshing about, simple.
The nice part is that (typically) low tax paying spouses/civil partners will be exempt - the new limit will only apply if an individual accesses a defined contribution pension worth more than £10,000. Therefore, anyone can make withdrawals from three small personal pots and unlimited small occupational pots worth less than £10,000 without being subject to the £10,000 annual allowance on further contributions. Perfect if you have time to plan ahead.
Thereafter, it changes a little. Anyone currently in flexible drawdown (ie; with no annual allowance and who have secured a £20,000 a year minimum income, in other words, most military career officers/WOs etc) will also be subject to the new £10,000 limit in April 2015. For individuals in capped drawdown though, the new £10,000 annual allowance will only apply when a saver withdraws more than their capped amount. The government said it would be 'unfair' to apply the £10,000 annual allowance to this group who did not know they would be subject to the rule when they entered capped drawdown.
It's going to be carnage. Savers won't have a clue and pension providers will struggle to establish what level of annual allowance applies in some cases, if there are pots all over the place.
On another note, it seems that savers with money in all DB schemes including AFPS but with only a small fund will be allowed flexibility in how they draw it. This might help those who served only a few years and who find themselves in aged financial misery and unable to access their money in a way that will help them most. That can only be a good thing - there's not much dignity in having a 'gold plated' pension when you have to cuddle a kettle to keep warm.