Retirement options.

When it’s time to draw from their pension, we make sure your clients are in full control. We’ll also help them do it as tax-efficiently as possible.

Flexible benefits.

Your clients can start taking benefits at any time after the age of 55, irrespective of whether or not they remain in employment. However, tax considerations may apply if benefits are deferred beyond the age of 75.

When drawing benefits they can receive a tax-free lump sum of up to 25% of the fund (limited to 25% of the Lifetime Allowance). This is known as a ‘pension commencement lump sum’ and should be drawn before they are 75 to avoid tax charges.

The balance of the fund is then used to support their pension income, which can be paid directly from their self invested pension plan. As a result, they do not need to purchase an annuity from an insurance company upon retirement.

Capped Drawdown and Flexible Drawdown allow your clients to retain control of their pension fund assets while receiving an income from them. Capped Drawdown also allows considerable flexibility in the payment of benefits on death.

Please Note: For your clients who have already taken drawdown options prior to April 2011, see the Treatment of USP and ASP from April 2011.

Phased Retirement

A benefit of the self invested pension plan is that it is split into a number of segments - each of which is effectively an individual plan. By drawing benefits from these segments at different dates, retirement income can be tailored to meet an individual's requirements, mitigating income tax liability.

For example, a senior employee may "retire" by gradually reducing their working hours. In this wind down period as earnings reduce, segments can be vested each year to provide an element of tax free cash which - combined with income - could replace the missing salary.

Unvested segments remain fully invested while those drawn upon can remain invested under the Capped Drawdown or Flexible Drawdown options.