Tax free cash calculation on money purchase scheme

turbobob

Hi,

I wondered if anyone would be able to help with a question I've had about this (from a family member close to retirement, who seems to have had conflicting information from different professionals).

How is the maximum tax free cash calculated on an EPP (written I believe under 87-89 rules). Is it straight 25% of fund value regardless of anything else? Or is it dependant on years service and final salary to a maximum of 25% (e.g. 3/80ths for each years service).

Due to his low salary, the 25% method works out a lot better, from the point of view of maximising TFC.. But is it allowed?

I'm afraid I'm not very familiar with the post "simplification" rules.

Cheers

Retired_I.F.A.

Here you go... under money purchase final salary schemes.
http://www.pensionsadvisoryservice.org.uk/occupational_pensions/retirement/

turbobob

Thanks for that. So he can take 25% then? Its their use of the "up to" phrase that put doubts in my mind.

Retired_I.F.A.

He can have any amount he wants up to the 25% limit.

He really ought to go see an I.F.A. before retiring and look into his options, they have changed quite a bit in recent years. Not only regarding annuity puchase but drawdown too.