Access to pension freedoms in ill health could lead to inheritance tax trap


Following the unveiling of its ‘Income Select’ retirement income solution last month, Old Mutual Wealth has further enhanced the retirement income options for its pension customers with the introduction of three new options which facilitate the delivery of regular income in a tax efficient manner - also known as ‘drip-feed drawdown’.

This new development, available from Nov 16, means that Old Mutual Wealth’s Collective Retirement Account (CRA) now provides advisers and their customers with complete flexibility in how their untouched pension savings are accessed under the new pension freedom rules.

Specifically, the new option provides optimum tax efficiency of withdrawals by allowing customers to use the least amount of pension capital to deliver their monthly retirement income needs. Once an instruction is made for regular withdrawals, the process is automatically repeated, including any associated benefit crystallisation event calculations.

Advisers and clients will be able to control the tax they pay on regular monthly income withdrawals by drip-feeding their tax-free cash lump sum in order to provide the required income, build a drawdown fund for future use, or combine monthly tax free cash withdrawals alongside of taxable income to deliver their monthly income needs. This is instead of taking all their tax free cash in one go.

Using tax free cash in this way avoids the need for clients to withdraw larger tax-free cash sums which they have to re-invest outside of a pension tax wrapper to deliver regular income needs. These options also ensure that clients retain as much of their pension savings as possible for future retirement needs and also to increase the potential legacy value that can be passed on in the event of their death.

To accompany these new choices, Old Mutual Wealth has also upgraded the functionality of its Retirement Income Explorer Tool (RIET), which allows advisers to map out a client’s income plan, using the most tax-efficient method available across all investment assets a client holds either on or off platform.

Using a sophisticated stochastic modeller, the tool helps advisers bring to life a range of probable outcomes, based on realistic forecasts of variables such as life expectancy, investment returns and inflation. The interactive process results in clearly written reports, which can be branded with the adviser’s logo, that will help to demonstrate the value of advice by illustrating likely outcomes in retirement dependent upon the choices a client makes.

The tool will also help advisers to regularly review the initial planning with their clients. It will enable advisers to take account of changing circumstances in health, income needs and changing values of underlying wealth that clients may have.

Adrian Walker, retirement planning manager at Old Mutual Wealth, comments: “These new retirement income choices within the CRA allow advisers and clients total flexibility over how they create tax-efficient withdrawals from pension savings.

“Combined with the sophisticated RIET tool, the CRA now enables advisers and their clients to achieve almost any available combination of taxed and tax-free income that they choose as part of any client’s retirement income planning – whichever and whenever suits the client’s retirement income journey the best.

“Since the pension reforms were announced in March 2014, we have constantly been looking to enhance the service that we offer advisers and their clients. The CRA was built with flexibility in mind and has been delivering flexible income options for advisers and clients for many years, but I’m delighted that these latest enhancements will significantly increase the solutions we have available.”

For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145

Notes to editors:

Quilter is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at


These materials are not an offer to sell, or a solicitation of an offer to purchase, securities in the United States. The securities to which these materials relate have not been registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There will be no public offering of the securities in the United States.

These materials do not constitute or form a part of any offer or solicitation or advertisement to purchase and/or subscribe for Securities in South Africa, including an offer to the public for the sale of, or subscription for, or the solicitation or advertisement of an offer to buy and/or subscribe for, shares as defined in the South African Companies Act, No. 71 of 2008 (as amended) or otherwise (the “Act”) and will not be distributed to any person in South Africa in any manner that could be construed as an offer to the public in terms of the Act. These materials do not constitute a prospectus registered and/or issued in terms of the Act. Nothing in these materials should be viewed, or construed, as “advice”, as that term is used in the South African Financial Markets Act, No. 19 of 2012, as amended, and/or Financial Advisory and Intermediary Services Act, No. 37 of 2002, as amended.

These materials are distributed in any member state of the European Economic Area which applies Directive 2003/71/EC (such Directive, together with any amendments thereto including Directive 2010/73/EU, the “Prospectus Directive”) only to those persons who are qualified investors for the purposes of the Prospectus Directive in such member state, and such other persons as these materials may be addressed to on legal grounds, and no person that is not a relevant person or qualified investor may act or rely on this document or any of its contents.

This document is being distributed to and is only directed at: (i) persons who are outside the United Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the “Order”); or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii) and (iii) above together being referred to as “relevant persons”). Any invitation, offer or agreement to subscribe, purchase or otherwise acquire securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.