for financial advisers only


Today the Treasury published their response to the consultation ‘Freedom and choice in pensions’. The Government confirmed the general path they are following to prevent abuse of the new post April 2015 flexible regime by announcing a reduced annual allowance of £10,000 for certain individuals. Defined benefit transfers from funded public sector and private sector schemes are largely unaffected, whilst the Guidance Guarantee is beginning to take shape.

Retirement reforms and the Guidance Guarantee CP14/11.

Inside Pensions


Phil Carroll runs through a worked example detailing how you can efficiently supplement a client’s retirement ‘income’ through other tax wrappers.

The economic crisis has hit the retirement income planning of clients with money purchase pension savings.

Adrian Walker looks at the implications for your clients from the changes to pension allowances confirmed in this year’s Budget.

This article explains the tax benefits associated with phasing retirement income.

It’s never too early to start planning for tax-year end, as Adrian Walker explains.

The tax-year end always provides valid financial planning opportunities but this year the clock is ticking faster than ever with the crucial deadline falling a day earlier. Adrian Walker uncovers the investing potential for your clients.

Inflation, pension savings’ arch nemesis, is about to be brought out of the shadows by new rules. Demonstrating the dangers to clients will help to create new opportunities for advisers, explains Adrian Walker.

Adrian Walker looks at some of the compelling retirement planning opportunities brought about by the 2014 Budget announcement.

Annual allowance

There are no limits on the amount that can be contributed to a registered pension scheme. However, there are limits on the tax relief that can be given. Tax relief on member contributions is limited to 100% of an individual’s relevant earnings or £3,600 if higher, and relief for employer contributions is subject to them being made wholly and exclusively for the purpose of the business.

There is no limit on the amount that can be saved into pension arrangements each year, but there is a limit on the amount that can get tax relief. The annual allowance is the maximum amount of tax relieved pension savings that can be made each year to all pension arrangements for an individual.

In simple terms a pension input period (PIP) is a period over which pension accrual is measured to determine whether an individual has exceeded the annual allowance in a particular tax year. It works on the principle of how much was saved from the start of the pension input period to the end of the pension input period.

The amount of pension saving made during a PIP is known as the pension input amount. The type of pension arrangement determines how the pension input amount is calculated. The types of arrangement are money purchase (for example personal pensions, executive pension schemes or additional voluntary contributions), defined benefit, cash balance and hybrid.

There are different annual allowance rules for Pension Input Periods that commenced before 14 October 2010 but end in the 2011/12 tax year.

Please note: Carry forward relates to unused annual allowance not unused tax relief. If the individual relies on carry forward to make a large personal contribution they must have the earnings in the current tax year to cover it.

If total pension inputs exceed an individual’s available annual allowance, they will be subject to an annual allowance tax charge. The charge will be levied at an ‘appropriate rate’. The appropriate rate is determined by adding the amount subject to the charge to the member’s ‘net income’.

This simple guide is designed to help you fill in all relevant information on the attached table to enable you to calculate unused Carry Forward allowances.

A fruitful retirement could all depend on the right PIPs, says Jon Greer.

The following guide outlines important information that is relevant to Skandia pension arrangements for individuals who are affected by the reduction in the annual allowance to £50,000 a year.

Pension Contributions and Tax relief

Employer contributions to registered pension schemes play an important part in funding retirement provision for directors and key employees. On an ongoing basis they will become more important when auto-enrolment is introduced into the private pension arena. This article covers the impact that employer contributions will have in relation to the pension changes introduced from 6 April 2011.

Higher rate tax relief is given by increasing the basic rate and higher rate band by the amount of gross contribution paid into a personal pension. The effect of this is that the investor will get higher rate relief by paying basic rate tax on income that they would have otherwise paid higher rate tax on.

Higher rate relief on personal pension contributions is generally given through Self Assessment. This article explains some of the key dates for Self Assessment and the effect of pension contributions on payments on account and balancing payments.

Ordinarily it is clear whether a contribution is being made by an individual, third party or employer. However, sometimes difficulty arises in identifying whether a contribution is being made by an individual or a business, especially where pension contributions are being made out of business bank accounts.

Salary sacrifice allows an employee to give up an amount of their salary and replace it with an employer’s pension contribution creating a larger pension contribution for the employee than they would have paid themselves for the same or lower net cost. The process can also be applied to bonus sacrifice with the same effects.

From the beginning of the 2010/11 tax year individuals with ‘net adjusted income’ in excess of £100,000 had their personal allowance reduced. This reduction will be at a rate of £1 for every £2 of income over £100,000. Based on the personal allowance, this means that any person with income over £120,000 will lose their full personal allowance applying for the 2014/15 tax year.

Death benefits

Adrian Walker highlights further changes to pension rules brought in this April that may have slipped under the radar.

Adrian Walker looks at the death benefit implications of the new income withdrawal regime.

This article looks at the effects of the HMRC consultation paper for simplifying trusts on spousal by-pass trusts on the Skandia CRA.


This at a glance article describes the requirements that need to be met to access flexible drawdown.

Adrian Walker explains why people who are in drawdown but not taking any income could be losing out, and should seek advice.

Adrian Walker provides details of the effects of the Gender Equality Directive on drawdown clients.

Adrian walker highlights the potential opportunities for advice from the forthcoming pension income withdrawal changes on 26 March 2013.

A drawdown arrangement that allows a client the flexibility to lock in a higher capped drawdown income limit is invaluable. We examine the issues that can affect the maximum income under capped drawdown and the options in a drawdown arrangement that are required to take advantage of them.

Adrian Walker delves into the latest developments in the flexible drawdown market.

Following a period of change in the capped drawdown market, Adrian Walker looks at what functionality can help you get the best income result for your clients.

Adviser Charging

This article is designed to outline the general principles of how VAT is related to the supply of goods and services in Financial Services.

HM Revenue & Customs has published guidance explaining the affect of Adviser Charging facilitated by deduction from a client’s pension.

Escalation and revaluation

This article explains the revaluation and escalation requirements that apply to Occupational pension scheme benefits.

Inheritance Tax and Pensions

There are a multitude of different types of registered pension scheme and a great degree of flexibility that can be exercised by the scheme member over the timing and form of benefits that can be taken. Consequently, this can make the interaction with inheritance tax a little complicated.


This article examines the key workplace pension scheme requirements.

Adrian Walker identifies advice opportunities that the introduction of workplace pension legislation will bring.

Lifetime Allowance

This article explores the practical implications of the reduction in the lifetime allowance on scheme members.

Adrian Walker explains how the reduction in the Lifetime Allowance will generate a whole segment of clients needing your advice.

This article considers the key points for Individual Protection.

Following recent details from HMRC, Adrian Walker looks at what you should be doing now for those clients who may be eligible for individual protection.

This article summarises the Lifetime Allowance calculations which should be used for different forms of protection.

The impending reduction in the Lifetime Allowance (LTA) could have a significant financial impact on affected clients. Adrian Walker explains why advisers should act now to provide advice during a unique window of opportunity.

When pension benefits are taken, a test is carried out to determine whether the member has sufficient unused lifetime allowance. There are now a variety of lifetime allowance protections that makes this test increasingly complex. This table details the various lifetime allowance protections. It also explains how to value previous benefit crystallisation events at the point further pension benefits are taken.

With the introduction of Fixed Protection 2012, Fixed Protection 2014 and Individual Protection in addition to the existing Enhanced protection and Primary Protection, this article is designed to summarise the calculations for each circumstance. These are not comprehensive notes.

Adrian Walker looks at the complexity of Individual Protection 2014 and considers the advice opportunities available for clients needing retirement income in the short term.

Tax-free cash lump sums

This article explains the need to protect valuable pre A-Day tax-free cash entitlements held in occupational pension schemes.

Some individuals who are members of occupational pension schemes or section 32 policies will have had entitlement to greater than 25% tax-free cash rights at A-Day. In recognition of this, these individuals are afforded a degree of protection, known as scheme specific tax-free cash protection. This article explains how this protection works.

This article explains what a block transfer is and how it can protect tax-free cash and early retirement ages when pension rights are transferred between pension schemes.

Back to basics

This ‘Back to basics’ guide lays out some of the basic facts that will be needed to understand the interaction between pension input periods (PIPs) and carry forward, and the fundamental concepts needed to understand the processes involved.

This ‘Back to basics’ guide lays out some of the fundamental facts needed to understand options under drawdown and the rules surrounding the processes for drawdown and death.

This 'Back to basics' guide lays out some key fundamental information that will need to be understood for the use of spousal by-pass trusts with different types of pension scheme structure.

This ‘Back to Basics’ guide lays out some of the fundamental facts needed to understand the different types of protection a member can have on their pension scheme benefits and how these are calculated.

Guaranteed Minimum Pension

The following sets out in detail the rules applying to the GMP that apply to members with pre 6 April 1997 service in a defined benefit contracted-out scheme. The information will be particularly useful when considering the transfer options available in respect of an accrued benefit under a Contracted-Out Salary Related (COSR) pension scheme.


QROPS now form a key element of retirement planning for individuals with UK pension funds who are planning to emigrate and want to look at the options for retaining their existing UK-registered pension scheme funds under UK legislation. This article looks to answer some of the key questions surrounding what a QROPS is and the rules applying to the way such schemes operate.

Transfer analysis

When considering the possible transfer of the cash equivalent of a client’s defined pension benefit it is a regulatory requirement to prepare a detailed transfer analysis report (except where a client is crystallising benefits within 12 months of the transfer). To help you in this process we have provided a sample of the report output below to which we have added explanatory notes.

Bankruptcy and pensions

This article outlines the details of a recent court case and its implications for pensions and bankruptcy of an individual.

April 2015 reform