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Defined Benefit pension transfer and lifetime allowance issues


By: Graham Walker Date: 11 December 2017
Category: Article,Lovewell Blake Financial Planning

As a result of ‘Pensions Freedoms’ legislation there has been an increase in members of funded Defined Benefit schemes wanting to investigate their options.

This is not surprising given the high transfer values being offered as a result of very low gilt yields and the fact that funds that would be ordinarily lost upon death, can now be passed down the generations.

Analysing whether a Defined Benefit pension scheme could be transferred is a complex process which not only takes into account the mathematical viability of the transfer but also the softer issues such as control over the investment funds, inheritability and income flexibility.

As part of this process the liability to future taxation for exceeding the ‘Lifetime Allowance’ is also taken into consideration.

Why is this important? As previously mentioned some of the transfer values being offered are very high and a transfer into a new money purchase pension arrangement together with investment growth and future contributions could mean that someone exceeds the prevailing LTA limit at the time they take their benefits. We are able to advise on how to mitigate or avoid this tax charge.

View a real life case study

Defined Benefit pension transfers can be highly beneficial, but a high degree of diligence is required as once a transfer is completed it cannot be reversed.

Lovewell Blake Financial Planning Limited has a team of highly skilled pension advisers who are able to appraise and consider the suitability of Defined Benefit pension transfers.

In the first instance contact Graham Walker for an initial discussion.
 
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