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The Pension Drawdown Company specialises
in providing advice on all aspects of pension
drawdown and investments

 
 
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Alternatively Secured Pensions

Prior to the pension regulation changes in April 2006 you had to purchase an annuity at age 75, however, this is no longer the case. You can now opt to either purchase an annuity or to convert the value of the Income Drawdown fund to an Alternatively Secured Pension plan. This is similar to a Pension Drawdown plan and continues to provide a degree of flexibility, as income can be taken between 55% and 90% of the published Government Actuaries Department (GAD) rate for a 75 year old. The income levels under an ASP must be reviewed annually.

Death benefits - Post Age 75

If you are in an Alternatively Secured Pension at the time of your death (i.e. after 75) the rules that govern the fund remaining in the plan are somewhat complicated. A summary of the main points are:-

  •  If surviving spouse is under age 75 they will be entitled to the fund and have the option of buying an annuity or enter into their own Unsecured Income plan when the income levels would be set in accordance with their age at that time. Alternatively they could purchase an annuity. 
  • If surviving spouse is over age 75 the alternatives are to continue in ASP or to buy an annuity.
  • If there is no surviving spouse the remaining fund can be paid to anyone nominated by you, but this will be treated as an unauthorised payment by the Inland Revenue and will be subject to a cumulative tax charge of up to 82% of the fund value.
  • If a member dies in ASP with no dependents, the remaining fund can be used to pay a Charity Lump Sum Death Benefit (CLSDB) to any charity nominated by the deceased member. If no nomination has been made the scheme administrator can make a CLSDB nomination. The CLSDB is paid tax-free to the nominated charity.

 Click here to contact us to find out more information on Alternatively Secured Pensions  

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When you become a client of The Pension Drawdown Company you will be able to have on-line access to up to date valuations for all your funds.

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