Hornbuckle Mitchell has launched Flexible Income Pension Plan (FIPP) to allow retirees using income drawdown to tailor benefits closer to their own needs.
The FIPP gives complete investment flexibility allowed by HMRC and control to allow tax-free cash withdrawal and income drawdown with the ability to move into an alternatively secured pension (ASP) or an annuity by age 75.
It also allows any retiree to switch funds into scheme pension, which offers the potential for the retiree to take a higher income in some circumstances because Government Actuarial Department (GAD) rates do not restrict the levels.
Neil Marsh, managing director of Hornbuckle Mitchell, says: “As the income is based on actuarial calculations about an individual’s own personal circumstances, it gives retirees the power to tailor the income they take to their own mortality expectations as well as to the value of the underlying assets rather than to artificial limits imposed by the Government.
“For example, a healthy person reaching 75 may not want to give up control of their funds by buying a lifetime annuity and also be keen to avoid the income restrictions imposed by ASP rules.
“Scheme pension may allow them to continue drawing a higher income while maintaining the flexibility to reshape that income to changing circumstances such as the onset of illness where it could offer better returns than would be available from an impaired life annuity.”
Hornbuckle Mitchell says the plan can also benefit those whose pension funds risk breaching the lifetime limit by allowing customers to withdraw a larger amount, and help retirees keen to use ‘gifts out of income’ rules to minimise future inheritance tax (IHT) liabilities.
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