Advantages of tax free cash

Rules surrounding the provision of tax free cash in a lump sum based on contributions made since A-Day have been simplified. The lump sum, now known as a pension commencement lump sum (PCLS), will be limited to 25% of the fund value built up within a client's registered scheme. This is subject to the fund not exceeding the lifetime allowance. The Pre Budget Report announced that there will be no increase in the lifetime allowance for the five year period beyond the 2010/11 tax year. This will limit the monetary value of the PCLS to £450,000 (i.e. 25% of £1.8 million lifetime allowance) ...