SIPPs - Alternatively Secured Pensions
Alternatively Secured Pensions have only been available since 6 April 2006. Prior to then, everyone had to use their pension savings to buy an annuity by age 75. This is still the basic rule but there is now an alternative option, ASPs.
An ASP is a form of pension drawdown. Instead of buying an annuity at age 75, an individual can continue to invest their pension savings and draw an income from their fund within limits. The minimum that must be drawn as an income from the fund is 55% of the rate of a single lifetime annuity rate calculated by the Government Actuaries Department . The maximum drawn down is 90% of that same rate. These rates were introduced with effect from 6 April 2007, following a review of Alternatively Secured Pensions by the Government. In the prior year, the rates were 0% (minimum) and 70% (maximum).
There is much talk that the current coalition government will scrap the 75 age cap for claiming of pension benefits.
An ASP is a form of pension drawdown. Instead of buying an annuity at age 75, an individual can continue to invest their pension savings and draw an income from their fund within limits. The minimum that must be drawn as an income from the fund is 55% of the rate of a single lifetime annuity rate calculated by the Government Actuaries Department . The maximum drawn down is 90% of that same rate. These rates were introduced with effect from 6 April 2007, following a review of Alternatively Secured Pensions by the Government. In the prior year, the rates were 0% (minimum) and 70% (maximum).
There is much talk that the current coalition government will scrap the 75 age cap for claiming of pension benefits.
ASP Death benefits
Your residual fund can be allocated to provide any of your dependents with a pension. Or paid in full or part to a charity nominated by you.
What is a dependant?
A dependant is defined as - your wife, or civil partner, any of your children who have not reached age 23. Children over 23 who are physically or mentally impaired may also be considered.
ASP and Future Annuities
You can either cease your Alternatively Secured Pensions when you wish to purchase an annuity, or continue with your Alternatively Secured Pension and use some of the fund to buy an annuity.
ASP and Inheritance Tax
Inheritance Tax (IHT) may be payable on the value of your Alternatively Secured Pension funds on your death© 2010, Sipps Now Privacy Policy
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Sipps Now, The Studio, 23 Thames Street, Hampton, TW12 2EW
Sipps Now work in conjunction with experienced IFA's to provide access to top quality self invested personal pension advice.
Sipps Now is a trading style of Web Builder Now Limited, registered in England number 04831019
