flexible vs flexi-access and capped drawdown

flexingh

hi all,

i was wondering if any of you know if under flexible drawdown one was able to fund into a personal pension, i have been informed now that flexi-access drawdown has taken over i would be able to pay upto £10,000 into a pension, which is good news i guess but can anybody confirm this?

also i can anybody tell me what the advantages of me being on capped drawdown would have been , i know its too late but i have been curious.

thanks

TH1878

flexingh wrote: »

hi all,

i was wondering if any of you know if under flexible drawdown one was able to fund into a personal pension, i have been informed now that flexi-access drawdown has taken over i would be able to pay upto £10,000 into a pension, which is good news i guess but can anybody confirm this?

also i can anybody tell me what the advantages of me being on capped drawdown would have been , i know its too late but i have been curious.

thanks

Correct. You can now pay £10,000 pa as your Flexible drawdown plan will convert to a flexi access drawdown plan.

Advantages of capped drawdown over Flexible? Mainly that you can continue contributing.

mania112

Here's a quirky one.

Someone transfers from old Flexible Drawdown to new Flexi-Access Drawdown but doesnt take an income (regardless of whether or not they did in the old contract, almost certainly they did or why would they have done it) - have they triggered their MPAA?

jamesd

The rules for those who had flexible drawdown set up have been relaxed to allow £10,000 a year instead of 30 per year in pension contributions.

Capped income drawdown allows taking the tax free lump sum and up to the GAD limit amount without triggering the reduction in the money purchase annual allowance from £40k to £10k.

mania112 I can't point you to the rules but the moment someone opted from flexible drawdown they lost their whole annual allowance and now have that increased to the £10k MPAA. I haven't read anything that would cause a previously triggered reduction to be undone, aside from that increase frm zero to 10k.