Some changes will take effect from next week.

We will:

- cut the income requirement for flexible drawdown from £20,000 to £12,000;

- raise the capped drawdown limit from 120% to 150%;

- increase the size of the lump sum small pot five-fold to £10,000;

- and almost double the total pension savings you can take as a lump sum to £30,000.

All of these changes will come into effect on 27 March.

These measures alone would amount to a radical change.

But they are only a step in the fundamental reform of the taxation of defined contribution pensions I want to see.

I am announcing today that we will legislate to remove all remaining tax restrictions on how pensioners have access to their pension pots.

Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want.

No caps. No drawdown limits.

Let me be clear. No one will have to buy an annuity.

And we’re going to introduce a new guarantee, enforced by law, that everyone who retires on these defined contribution pensions will be offered free, impartial, face-to-face advice on how to get the most from the choices they will now have.

Those who still want the certainty of an annuity, as many will, will be able to shop around for the best deal.

I am providing £20 million over the next two years to work with consumer groups and industry to develop this new right to advice.

When it comes to tax charges, it will still be possible to take a quarter of your pension pot tax free on retirement, as today.

But instead of the punitive 55% tax that exists now if you try to take the rest, anything else you take out of your pension will simply be taxed at normal marginal tax rates – as with any other income.

So not a 55% tax but a 20% tax for most pensioners.

The OBR confirm that in the next fifteen years, as some people use these new freedoms to draw down their pensions, this tax cut will lead to an increase in tax receipts.

These major changes to the tax regime require a separate Act of Parliament – and we will have them in place for April next year.

Mr Deputy Speaker, what I am proposing is the most far-reaching reform to the taxation of pensions since the regime was introduced in 1921.

But there is one final reform to support savings I would like to make.

Mr Deputy Speaker,

There is a 10 pence starting rate for income from savings.

It is complex to levy and it penalises low income savers.

Today I am abolishing the 10 pence rate for savers altogether.

No tax on those savings whatsoever.

And we will almost double this zero-pence band to cover £5,000 of saving income.

One and a half million low income savers of all ages will benefit.

Two thirds of a million pensioners will be helped.

Mr Deputy Speaker,

The £15,000 New ISA.

The Pensioner Bond.

People given access to their own pension pots.

A right to impartial advice.

The 10p rate for savers abolished to zero.

The message from this Budget is:

you have earned it;

you have saved it;

and this government is on your side.

Whether you’re on a low or middle income,

Whether you’re saving for your home, for your family or for your retirement.

We’re backing a Britain that saves.

Mr Deputy Speaker,

The central mission of this government is to deliver economic security.

We’re not promising quick fixes.

Instead we’re taking the next steps in our long term plan.

The forecasts I’ve presented show:

- growth up;

- jobs up; and

- the deficit down.

Now we are securing Britain’s economic future with:

- manufacturing promoted;

- working rewarded;

- saving supported

With the help of the British people we’re turning our country around.

We’re building a resilient economy.

This is a Budget for the makers, the doers, and the savers.

And I commend it to the House.