09 Mar 2015

A question about : Pre-existing capped drawdown and review requirement.

I first did capped drawdown in March 2011 -
I intend to stick within GAD rates - am I still required to do the 5 year/3 year reviews after April 2015?

Also - if someone inherits a pension in drawdown can they carry on contributing to it as a pension fund? If it's inherited as a FAD does that limit any contribution by the inheritor to 10k?

Best answers:

  • If you stay in capped drawdown then there is a requirement for the reviews to take place.
    You can move into flexi-access drawdown without going over the capped drawdown limits just by making an election to your administrator. Once this is done the review limit falls away.
    You can't contribute to a pension arrangement that you inherit, but you can theoretically hold the inherited pension arrangement in the same scheme as a pension arrangement that you didn't inherit (i.e. the one you've been building up yourself through your contributions).
    The amount of pension you take from the inherited arrangement won't have any impact on the amount you can contribute to your own arrangement. This is regardless of whether they are held in the same scheme, or separately.
  • Will it matter to you if you have your annual contribution limit reduced from Ј40k to Ј10k? If not then switching to flexi-access drawdown seems reasonable enough. If you want more than the Ј10 contribution allowance you'll need to stay in capped drawdown to take out more than the initial 25% tax free lump sum.
  • Thanks both -just musing about what I might be able to pass on the to the kids.
    IFA reviews might well be worth it but not Ј300 for a pointless chat with my provider's representative on earth .................