![]() Imagine your pension plan is divided say into e.g.100 mini pension pots. It delivers this by dividing the pension fund into a number of identical policies within the plan. Phased flexible drawdown works on the same principle as Phased Retirement Annuities and Phased Capped Drawdown. ![]() the non-tax-free cash (crystallised) element you are then restricted by the Money Purchase Annual Allowance (MPAA) in the maximum new pension contribution amounts that can be paid into an investment linked pension on your behalf (by you or your employer) of just £4,000 pa gross in total. That said, once you have triggered flexible access to the taxable part of the pension fund i.e. You are still able to make ongoing pension contributions whilst using flexi access drawdown. If the beneficiary continues with drawdown, then tax is also payable at their own marginal rate. ![]() If death occurs after age 75 and a lump sum is paid out to a beneficiary, all money drawn by the beneficiary will be taxed at their marginal rate. If you have taken out all the tax-free cash lump sum, then all pension money will be treated as ‘crystallised’ benefits. Only 25% would be tax free and the balance would be taxable as income in the tax year it was drawn. If you want to, you can take the whole pension fund out in one go. You would take any tax-free cash ( pension commencement lump sum) at the outset and then income (if you need it) without any restriction on the amount you can take and when. You can choose to transfer your pension fund to another provider (or remain with your existing provider) and utilise an unsecured pension, using full flexible access drawdown. Since 6 th April 2015 we have all been able to take advantage of flexible access drawdown where there is no limit to the amount you draw from your pension.
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