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.

Benefit options summary

Increase in normal minimum pension age in 2028

Safeguarded benefits

Taking benefits

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. 

What is flexi-access drawdown?

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.

Capped income drawdown and review dates

Beneficiary drawdown

Beneficiary drawdown is a death benefit option.

Beneficiary drawdown

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.

Income drawdown - the good, the bad and the ugly CPD

CPD |Centralised retirement propositions

In 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.

Centralised retirement propositions

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.

Transfers in drawdown

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.

Lifetime allowance - All you need to know

Benefit crystallisation events and the lifetime allowance charge

Lifetime allowance

Lifetime allowance charge

Lifetime allowance: is paying a tax charge such a bad thing?

It's 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.

Fixed protection

Individual protection

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.

Lifetime allowance - take it to the limit and beyond

Lump sums

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

Trivial lump sums

Small lump sums

Uncrystallised funds pension lump sums

Winding-up lump sums

Emergency rate tax

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

Emergency tax and lump sum withdrawals

Reaching age 75 

We look at reaching age 75 in our top five FAQs

Reaching age 75: our top five frequently asked questions

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.

Planning for age 75


Once benefits have been taken, it's 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.

Recycling of tax-free cash

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.

Listen to the podcast 

Read the policy summary (PDF)

Read the full policy paper (PDF)

Our frequently asked questions

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

Income drawdown

Lifetime allowance

Pension ages


Triviality and small pots

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