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

 
 
11 March 2010

How Safe Is Your Pension

Defined Benefit, or Final Salary Schemes, in the UK have a collective deficit of £253 billion as at the end of March. This is reported by the government sp…

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Alternatively Secured Pension (ASP) 

Before 6 April 2006, the benefits from all pension plans had to be taken using an annuity by age 75.

On the 6 April 2006 an alternative to purchasing an Annuity was introduced. This is an Alternatively Secured Pension(ASP) and allows pensions to be taken after age 75 from your invested funds in a similar way to an income drawdown plan. Therefore at age 75 you now have the choice of an Alternatively Secured Pension (an Unsecured Pension) or an Annuity (a Secured Pension).

The main features of an Alternatively Secured Pension are:

  • ASP can only start at age 75. It will normally start on the pensioner’s 75th birthday – however there are some circumstances where ASP can start after age 75 (for example where a widow/widower inherits an income drawdown fund on his/her spouse’s death)
  • You retain ownership of your pension fund and control over your investments with the potential for continued fund growth
  • Benefits must be crystallised before age 75 by way of an income drawdown (unsecured pension - USP) or the right to take a tax-free lump sum will be lost
  • Like a Pension Drawdown plan it 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 must be reviewed annually
  • Funds continue to be invested in a tax efficient environment ASP funds can be transferred to another pension scheme after income drawdown has started
  • The whole of your ASP fund can be passed to your spouse without any penalty on your death for them to take benefits in whichever way they choose, which will depend on whether they are above or below age 75

 If you would like to find out more about Alternatively Secured Pensions call us FREE on 0800 03 04 008 to talk to one of our pensions specialists.

For thirteen years Jonathan Walker of The Pension Drawdown Company has managed our private pensions and investments most reliably and efficien ... click here for more

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