In this section
The beneficiary flexi-access drawdown conundrum
Beneficiary flexi-access drawdown (BFAD) allows individuals to pass on pension benefits in a manner where the beneficiaries have immediate access to the funds after death, while retaining some of the main advantages of being within a pension arrangement. This includes tax-free growth and favourable IHT treatment.
The rules for who can receive pension funds as a BFAD arrangement are quite complex though. Additionally, the option to “nominate” non-dependants means that expression of wish forms need to be regularly reviewed and updated where required.
Paul Squirrell, our pension expert discusses the pitfalls and issues to be considered with the payment of beneficiary flexi-access drawdown death benefits.
Please note that the nomination process and Expression of Wish form detailed in this video is now also available online with our new straight through journey.
The BFAD conundrum
Many in the industry argue the changes to the death benefit tax rules applying to money purchase arrangements were amongst the most significant brought about by the 2015 pension freedoms. Fundamental to the new tax rules for death benefits was the introduction of beneficiary flexi-access drawdown (BFAD).
The rough guide to money purchase pension death benefit optionsDownload now
Pension death benefits payable under money purchase schemesDownload now
Pension death benefits payable under defined benefit schemesDownload now
Expression of Wish and Nomination form guide
A client-friendly guide explaining the importance of completing an expression of wish.Download now
Questions or feedback
Although the information provided in this package is fairly comprehensive, it may not answer all your questions. While we can’t undertake to respond to you individually, we’d like to hear your feedback to help develop material that best assists you.