Occupational Pensions & Income Drawdown

If you have a pension which is governed under occupational rules, then you may be able to opt for a drawdown contract, and be able to take more than 25% of the fund as a tax-free lump sum. have the option to maintain the level of tax-free cash.

Whether you can do this depends on your circumstances. There would either need to be a bulk transfer, or a winding up of the current scheme.

A minimum of two members transferring benefits at the same time would constitute a "bulk transfer". This would open up the option of a Section 32 Drawdown contract. This type of plan works in much the same way as Personal Pension Income Withdrawal. The main differences are:-

• There are less providers who offer this product

• It can only accept transfers from Occupational Pensions

The main advantage of this type of contract is the possibility of taking more tax-free cash than 25% of the fund. This would be the main reason anyone would opt for this type of Income Withdrawal Plan, i.e. to enable you to take your existing occupational pension and allow you to take a higher level of tax-free cash.

If a scheme is being "wound up"  (in effect being closed), then it is possible to transfer and still maintain a tax-free cash entitlement greater than 25% of the fund, if the current entitlement is greater than 25%.

Although you must remember the amount of tax-free cash available depends on a number of factors – your length of service, salary and when you joined the scheme.

If you are a member of an occupational pension scheme, we will be more than happy to advise you on Income Withdrawal and other options, just contact us to discuss your requirements now.

Contact us now - free 0800 0725987, and without obligation - to discuss how income drawdown might be suitable for you.