Skandia warns on capped drawdown 55% tax charge

The provider said 59% of customers in capped drawdown are not taking an income, after having taken the maximum tax-free lump sum. This means the rest of the pension fund is left invested and technically in drawdown, even though they are not taking an income and the fund is subject to a 55% tax charge if paid as a lump sum to a beneficiary on death. The firm said the size of the tax charge should prompt people to take financial advice on how to mitigate the risk. However, it added leaving money exposed to a 55% tax charge could not be a bad thing when account income tax and inherita...