The budget update will contain the usual changes to rates and allowances, along with the first phase of our Pensions Freedom changes. All benefits you have entered into existing pension items will be converted to the new format (see example below). The top table shows the planned benefits to be taken. The lower ‘Crystallisations’ table shows the value of the fund at each benefit crystallisation event, the value of the crystallisation, and how much of this will be tax free.
You now have the freedom to enter as many benefit events as you like – each can be specified either as a monetary amount, or a percentage of the uncrystallised fund. You have control of whether the benefits are taken as Annuity, Drawdown, or Lump Sum, along with any tax free elements. You can specify the start date, frequency and end date of each benefit.
For Drawdown benefits, you can now crystallise part of the fund and take tax free cash, whilst delaying taking drawdown income (e.g, crystallise £100,000 at age 60, taking 25% tax free, and delay taking drawdown income until age 65).
As an example (shown below), we have specified that 1% of the uncrystallised fund will be withdrawn each month for 10 years, with 25% of each withdrawal being tax free.
Upon saving, the benefits tab may look something like this:-
You can also set pension benefits to be taken from Key Dates. The example below shows how you can demonstrate with your clients the lifelong effects of their crystallisation decisions. Simply drag the Key Date sliders along the Age axis.
We plan to release some more lifelong cash flow pension tools soon, to make your client meeting experience slicker than ever.
Our offices will be closed from Good Friday 3rd March until Easter Monday 6th April. We re-open on Tuesday 7th April, when we will make our budget update available. Our support team will be on hand, as ever, to answer any questions you may have.
