SWEEPING new pensions regulations which aim to encourage people to save more towards their retirement come into force today.
Today - which has been dubbed A-Day - sees the biggest overhaul of the rules governing pensions for 50 years.
The changes aim to simplify pensions by abolishing the current eight tax regimes that govern them, replacing them with a single set of rules.
The current complex limits on how much money people can put into a pension scheme each year will also be scrapped.
Instead, workers will be able to save up to 100% of their salary each year, up to a limit of £215,000 in 2006/2007.
A new lifetime cap on the amount of pension saving that can qualify for tax relief is also being introduced, set at £1.5m this year.
Other changes will enable people to continue working for a company even after they are drawing their pension from it, introducing a more flexible approach to retirement.
The rule forcing people to use their pension fund to buy an annuity by the time they are 75 is also being scrapped. Instead, people will be able to opt for an Alternative Secured Pension.
But the minimum age at which people can start drawing their pension is being increased from 50 to 55 by 2010.