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Beneficiary drawdown

Leaving a pension as a legacy

Since 2015, the way death benefits are taxed means:

  • defined contribution pensions could be the last to be accessed
  • an opportunity has been opened up for generational wealth planning
  • potential beneficiaries should be involved in the intended planning
  • financial planning opportunities have been created for future savings patterns.

The Collective Retirement Account (CRA) is a pension arrangement where your clients can take full advantage of the death benefit flexibilities on offer. Beneficiary drawdown might not be available via all defined contribution pension schemes so you will need to check your client’s current arrangements.

Beneficiaries’ drawdown

  • Beneficiaries/nominees don’t need to be financial dependants for the future
  • Can be passed on in perpetuity
  • Beneficiaries flexi-access drawdown – tax treatment depends on date of death of the member
  • Not part of beneficiaries’/nominees’ own Lifetime Allowance
  • Leaves funds in pension arena for use as and when needed
  • Opens up intergenerational planning from potential funds available

Beneficiary drawdown within the CRA has no age restrictions, meaning beneficiaries under the age of 18 are able to access this facility.

Case studies

Change in death benefit legislation

 

Need more information? Please contact your consultant or call us on 0808 171 2626 (between 8.00am and 7.00pm Monday – Friday).

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