Standard Life Executive Pension Plan with Guaranteed Annuity Option

alsace-dave

I have a pension plan as above due to come into effect on my retirement date later this year, The retirement value in round figures is £98k. The value of the Pure Endowment part of the plan with a GAO is £51k which could currently provide a guaranteed income of £5600 a year according to Standard Life. That seems pretty good to me. Can I take my 25% tax free lumpsum out of the £98k, still leaving all the 51k for the guaranteed income? To be honest, I'm not quite sure how this type of pension works, (my other pension is a straight forward defined contribution one which I have already taken my 25% tax free and moved the rest into drawdown). 

Linton

I think you will need to talk to SL.  One of my pensions had a GAR of 11%, same as yours.  In my case I was given a fixed and very limited list of options as to how the pension could be taken. 

Albermarle

Even a guaranteed income of £5600 from £98K would be  actually quite good, although it depends on if the income is inflation linked or not. If it is inflation linked you have a very good deal. Something to keep in mind when you find out the actual options available.

dunstonh

EPPs often have the ability to take greater than 25% TFC as well.  However, you need to consider the breakeven point after tax.   A good GAR in the right circumstances can make taking less TFC a more sensible thing to do.

p00hsticks

dunstonh said:

EPPs often have the ability to take greater than 25% TFC as well. 

Yes, I've got an EPP with Standard Life and reached my original proposed retirement date around three months ago. When I spoke to Standard Life about my options the first thing they wanted me to do was complete a form detailing my yearly salary whilst with the company in order to work out whether I could take more than 25% tax free. (They then wrote to me to say I was only entitled to 25%, but I've not taken it any further at present as lockdown rather got in the way).