Lifetime allowance and benefit options

The main purpose of a pension is to provide an individual with an income when they reach a certain age. This section provides information on the way benefits can be taken and the limits, protections and allowances that are available to your clients.


This analysis focuses on when benefits can be taken, summarises the main options available and also looks at the restrictions that apply.

Income drawdown

One of the most popular options is income drawdown. There are two types: capped and flexi-access drawdown.

Flexi-access drawdown

Since 6 April 2015 any new drawdown plans must be a flexi-access drawdown plan. 

Capped drawdown

New capped drawdown plans were only available until 6 April 2015. Existing plans can continue as long as the GAD limit is not exceeded.

Beneficiary drawdown

Beneficiary drawdown is a death benefit option is a death benefit option.

Defaqto drawdown guide - ‘Using drawdown to provide a sustainable income’

We’ve worked closely with Defaqto and our own Royal London pensions technical experts to produce a detailed drawdown guide – packed with facts and tips to help advisers research and provide compliant recommendations to their clients.

CPD | Income drawdown – Here we look at the market trends since pension freedoms began in 2015, including changes in withdrawal patterns and the consideration of changes in the demographics of UK society. Craig also talks about the retirement outcomes review (ROR), how this has changed at retirement advice and much more including best practice in FAD file construction how to review income drawdown plans in a compliant and cost effective manner. Recorded on 18 November 2020.

CPD |Centralised retirement propositionsIn this webinar, we explore the intricacies of centralised investment proposition (CIP) and centralised retirement proposition (CRP) frameworks, their relationship with the PROD rules and looks at how the financial planning community has been adopting and integrating these models within formal advice processes. Recorded on 19 November 2020.


CPD | Transfers in drawdown – In this webinar we consider whether the drawdown plan remains suitable to achieve the client's needs and objectives on an ongoing basis. We also cover some of the legislative aspects advisers need to be aware of, the Retirement Outcomes Review and the PROD rules (in the context of transfers in drawdown), and more.

Lifetime allowance

There is a maximum amount that can be taken from a pension scheme without being subject to a tax charge. This is called the lifetime allowance and fittingly the tax charge is called the lifetime allowance charge.

It is currently possible to protect benefits from a lifetime allowance charge as a result of the lifetime allowance being reduced. This protection has the effect of locking the lifetime allowance at a certain rate, meaning the reduction won't apply. However, there are conditions which, if broken, will result in protection being lost.

CPD | Lifetime allowance - take it to the limit and beyond – In this webinar we explore what the most encountered BCEs are and the options for paying the lifetime allowance tax charge when it’s due. You’ll also hear more about different lifetime allowance protection options and the role these can still play in the advice process.

Lump sums

Sometimes it's possible to exchange all pension benefits for a one-off lump sum.

Emergency rate tax

An explanation of when emergency rate tax applies and how to get it back.

Reaching age 75 

Our top five frequently asked questions

We look at reaching age 75 in our top five FAQs.

CPD | Planning for age 75 – This webinar discusses how tax relief on pensions changes at age 75 as well as the potential advantages and disadvantages of retaining uncrystallised benefits after age 75. We also talk about the benefit crystallisation events which occur at age 75 and use examples to bring these to life.


Once benefits have been taken, it is possible to re-use this money and pay it back into a pension. However, you won't be surprised to hear that there are rules and restrictions in place.

Retirement benefits in public service pension schemes

This interactive policy paper looks at the wider rules of the Teachers’ and NHS pension schemes and how members can claim their benefits.

Our frequently asked questions

Here we look at some of the questions we are asked most often. 

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.