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Retirement planning

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Collective Retirement Account

The Collective Retirement Account (CRA) is held within our Defaqto Gold-Star-Rated Old Mutual Wealth Personal Pension Scheme. It is a truly flexible plan for life, allowing your clients to continue accumulating retirement savings at the same time as taking retirement income. Unlike many pension arrangements, the CRA does not require clients to crystallise at age 75.

The CRA delivers all of the options below within the same account and at no additional cost. This gives your clients the methods of withdrawal you need to help ensure, that when they wish to access their pension savings, on or after their 55th birthday they:

  • don’t pay too much in tax
  • can gain access to their money when they need it, and
  • have the option of leaving a tax-efficient legacy if that’s part of their plan.

Our withdrawal options

All of these options are provided at no additional cost:

  • Flexi-access drawdown
  • Capped drawdown (where drawdown started before 6 April 2015)
  • Small pots payments
  • Taxable lump sums from uncrystallised funds via flexi access drawdown
  • Full encashment
  • Purchase of a lifetime annuity through use of the open market option
  • Beneficiaries/nominee/successor flexi-access drawdown
  • A choise of two automated regular income withdrawal  facilities whereby income can be taken:

    - initially, only from the client’s tax-free cash, thereby building a taxable drawdown fund for future use with each encashment, or

    - by encashment of uncrystallised funds to generate an income payment, of which 25% is tax-free and the remainder is subject to income tax at the client’s marginal rate.

There are no charges for withdrawing income.

What are the benefits?

These facilities may be suitable for clients who have no immediate need to access large amounts of their tax-free cash entitlement, but who do need a level of regular income to be generated from their pension savings. They provide the ability to:

  • take tax-free cash on a regular basis to provide a source of retirement income on which the client will suffer no income tax liability
  • minimise encashment by delivering regular income on an ‘encash-as-you-go basis’. This ensures clients will keep the maximum level of pension savings fully invested, enabling them to benefit from future growth potential – not only increasing the potential for future personal income, but also leaving as much as possible available for legacy planning.

The tax treatment and efficiency of these options will depend on the individual circumstances of each customer. Tax rules and their application may change in the future.

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Personal Pension (Single price – series 6)

The Personal Pension is a tax-efficient registered pension scheme.

As well as accepting contributions made by clients and/or their employer, it can also accept transfer payments from other UK registered pension schemes or overseas pension schemes approved by Old Mutual Wealth. 

When the client wishes to draw benefits, currently normally after 55, their personal pension fund can facilitate the provision of a tax-free cash sum and income to suit their specific needs. This can be done without any additional charge being incurred under the plan and is implemented by transferring the value of their fund to another registered pension scheme of their choosing.

Self Invested Personal Pension (SIPP)

The Old Mutual Wealth SIPP is a tax-efficient, registered personal pension scheme administered by A.J. Bell Limited. As the investments are not restricted to insurance company funds, there is a much wider investment choice with a SIPP including the option to hold investments such as commercial property, land and stocks and shares. The Old Mutual Wealth SIPP can also hold a Collective Investment Account as one of its assets.

The Buyout Bond

The Buyout Bond is a unit-linked single member registered pension scheme that is designed:

  • for clients to transfer a pension fund from an existing ‘Section 32’ buyout bond contractfor clients to transfer a fund from a single member occupational pension scheme, or
  • for trustees of money purchase occupational pension schemes to use to buy out member benefits when winding-up the underlying occupational scheme.
  • It enables clients to retain tax-free cash entitlements that may be greater than 25% of their retirement fund value.

It also offers a wide choice of investment funds and will provide a wider range of retirement income options than may have been available under the original plan that held their pension savings.

Flexi-access drawdown is available as a retirement income option through transfer of the fund, after any tax-free cash payment has been made, to any other registered pension scheme of the client’s choosing.

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