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Collective Retirement Account - Flexible withdrawals

A truly flexible plan for life
 

Nine flexible withdrawal options

The Collective Retirement Account (CRA) delivers all of the options below at no additional cost. This gives your clients the methods of withdrawal you need to help when they wish to access their pension savings, on or after their 55th birthday.
 

Tax efficiency with withdrawal flexibility

Option
Detail
Open market option
Option to purchase a lifetime annuity for a guaranteed income for life.
Flexi Access Drawdown
From age 55, no restriction on the amount of income that can be withdrawn. Withdrawals will trigger the money purchase annual allowance (MPAA).
Lump sums
Normally up to 25% can be withdrawn as a tax-free lump sum.
Capped Drawdown
Existing pre-April 2015 drawdown contracts only. Removes the need to enter flexi access drawdown. No money purchase annual allowance (MPAA) trigger.
Small Pots
Up to £25,500 ad hoc net withdrawal. Emergency income tax avoided. No money purchase annual allowance (MPAA) trigger. Need some available lifetime allowance. Not suitable for clients who have registered for Enhanced Protection or Fixed Protection 12, 14 or 16 (or are wanting to register for FP16) or have a protected tax-free cash lump sum or protected early retirement age.
Beneficiary Drawdown
Full flexibility available for pension death benefits with dependants, nominees and successors all able to access beneficiary drawdown.
TRIO: Pension commencement lump sum only

Tax-efficient regular income options (TRIO).

All three are automated regular payment options for efficient
set up and management. For clients who want to receive a
regular payment but also wish to continue to grow their pension
commencement lump sum entitlement. Income tax can be
saved and less could be in your client’s estate for inheritance tax
purposes. Need some available lifetime allowance.
TRIO: Pension commencement lump sum plus full income
TRIO: Pension commencement lump sum plus some income
 
Some people think a pension is all about how much you can take out as a lump sum. It’s not. It’s about how much you can take out as an income and keep going.
Anonymous adviser

What are the benefits of TRIO?

These options may be suitable for clients who have no immediate need to access large amounts of their tax-free cash entitlement, but who do need a level of regular income to be generated from their pension savings. They provide the ability to:
 
  • take tax-free cash on a regular basis to provide a source of retirement income on which the client will suffer no income tax liability
  • minimise encashment by delivering regular income on an ‘encash-as you-go basis’. This ensures clients will keep the maximum level of pension savings fully invested, enabling them to benefit from future growth potential – not only increasing the potential for future personal income, but also leaving as much as possible available for legacy planning.
The tax treatment and efficiency of these options will depend on the individual circumstances of each of your clients. Tax rules and their application may change in the future.

Next steps

The value of advice

This short client-facing video highlights why making nominations is important to ensure your client's wishes to leave a legacy are clear.

Watch the value of advice video

Death benefit planning

Find out how your clients can take full advantage of the death benefit flexibilities on offer through the Collective Retirement Account (CRA).

Death benefit planning

Client guide

How to use the money in your pension pot.

View client guide