Pensions and lifetime planning—Part 2
Produced in partnership with John Hayward, Pensions Author, and Wyn Derbyshire of Gunnercooke LLP

The following Private Client practice note produced in partnership with John Hayward, Pensions Author, and Wyn Derbyshire of Gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Pensions and lifetime planning—Part 2
  • Benefits on retirement—general
  • Tax-free cash lump sums
  • Recycling cash lump sums
  • Pensions
  • Drawdown pensions
  • Calculation of drawdown pensions
  • Phasing
  • Flexible drawdown

Pensions and lifetime planning—Part 2

This Practice Note looks at the benefits which are payable where a member of an occupational or personal pension scheme retires. It explores the opportunities to maximise the benefits and their flexibility. These benefits include tax-free cash lump sums, pensions and drawdown pensions together with flexible drawdown pensions. The Practice Note also explains the position of qualifying recognised overseas pension schemes (QROPS) and transfers of retirement benefits that may incur the overseas transfer charge applicable from 9 March 2017.

Benefits on retirement—general

Since 6 April 2010, the payment of retirement benefits is only allowed from age 55. There is no upper age limit by which retirement benefits must be taken. Individuals do not have to retire to receive benefits and not all of a member’s retirement benefits have to be vested at the same time, but may be taken in tranches (see below). From 6 April 2015, flexible drawdown has been available for members of defined contribution schemes to enable them to access as much as they want when they want. These various options permit a series of vesting dates of the member’s choice, ie phasing, and allow members to remain in the same employment, full time or part-time, or to be employed elsewhere.

Tax-free cash lump sums

The payment of a tax-free cash lump sum on retirement may be made. The maximum cash

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