Taking retirement income
There are a number of ways clients can take an income from their pension with us. They can enter into flexi-access drawdown and you have the ability to arrange automated regular crystallisations on their behalf. In addition, we support clients with existing capped drawdown arrangements as long as they remain within the income limits. Clients can also make UFPLS withdrawals and can receive small pots, ill health and serious ill health payments (subject to meeting the conditions for these payments).
Flexi-access drawdown is available to all pension clients (including phased drawdown). We also support clients with existing capped drawdown arrangements as long as they remain within the income limits.
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Submitting online drawdown applications
We understand the importance of clients receiving their tax-free cash and income as quickly as possible. To assist you in ensuring applications are processed as quickly as possible, we have outlined some useful tips for submitting clients’ instructions.
1. Select the appropriate option online
The options you have are as follows:
- If crystallising money from an existing Pension Savings Account, select Crystallise Account.
- When transferring money from another provider to us and you would like to crystallise all or part of it, select Transfer to Immediate Drawdown.
- When transferring crystallised money from another provider to us (any uncrystallised money held in the same account can also be transferred within this application), select Drawdown to drawdown transfer.
2. Consider switching to cash
When crystallising an existing account, it speeds up the payment process where money is already available within Product Cash for tax-free cash and any one-off income payment. It is worth considering ‘over selling’ to allow for platform and adviser fees which may be taken prior to us processing the benefit crystallisation event.
3. Choose which investments to sell for regular income
Regular pension withdrawals are paid from cash first within a drawdown account (where it is available). When setting up the instruction, you can choose from two options if not enough cash is available in a particular month:
- You can nominate an investment to sell (once this has been sold down, we will then sell from the largest remaining fund and so on)
- Alternatively, if there is no nomination, we will sell investments proportionally from all investments in the drawdown account.
For both these options, an amount to cover any applicable dealing fees or fund manager sell charges will also be sold.
If a client already has a regular income set up using the ‘largest investment’ method, then this will continue until you change the instruction. You will be able to choose from nominating an investment or selling proportionally.
4. Bank mandate verification
If we have not made payments to a bank account before, we’ll need to verify the account before making any payments. In some instances, where this verification fails, a copy bank statement received by the client in the post and dated within the last three months will need to be sent to us.
5. Lifetime allowance information
Please ensure you provide the percentage of the lifetime allowance used. For existing clients, we show this in either 'Client summary' or 'Account view'.
6. Additional information
We will also require evidence of any transitional protection – please see frequently asked questions below.
Frequently asked questions
Drawdown and Uncrystallised Funds Pension Lump Sum (UFPLS) compared
A look at how these two decumulation options measure up against each other.
Retirement income hub
A hub presenting insights and ideas on ensuring a client’s income lasts a lifetime.
The Pension Forum
Paul Squirrell, our pension expert, clarifies the rules relating to some specific areas of retirement planning.