FOR ADVISERS ONLY
Lifetime allowance and benefit options
The basics
This analysis focuses on when benefits can be taken, summarises the main options available and also looks at the restrictions that apply.
Reaching age 75: our top five frequently asked questions
We look at reaching age 75 in the latest in our series of top five FAQs on pensions technical topics.
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.
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 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.
Investment pathways
In this podcast, we discuss the ROR phase 3 changes. Recorded in December 2020.
Lump sums
Sometimes it's possible to exchange all pension benefits for a one-off lump sum.
- Triviality lump sums for defined benefits
- 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.
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
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 | Opening the door to lifetime allowance and relevant life – In this webinar we look at the features and benefits of a relevant life plan, and how it could be an efficient form of life cover for those clients who may have a lifetime allowance issue
Recycling
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.
Send us your burning questions through our ‘Ask a question’ page.
Share by email:
Share by email: