Chapter PTM062590
Published date | 27 March 2015 |
Record Number | PTM062590 |
Glossary | PTM000001 |
Pensions that are included in the minimum income requirement (up to 5 April 2015)
Pensions that do not count towards the minimum income requirement (up to 5 April 2015)
Valuing any relevant income received which is not being paid in sterling (up to 5 April 2015)
Note: Flexible drawdown funds in existence immediately before 6 April 2015 are from that date automatically treated as flexi-access drawdown funds, which have different rules. No new flexible drawdown funds can be set up from that date. For guidance on flexi-access drawdown funds, see PTM062700.
Pensions that are included in the minimum income requirement (up to 5 April 2015)Paragraph 14 Schedule 28 Finance Act 2004
Regulation 3 The Registered Pension Schemes (Relevant Income) Regulations - SI 2011/1783
Regulation 9 The Pension Protection Fund (Tax) Regulations - SI 2006/575
The minimum amount of other pension income a member must be receiving in order to be eligible for flexible drawdown under the tax rules is:
- for flexible drawdown declarations made before 27 March 2014, £20,000, or
- for flexible drawdown declarations made on or after 27 March 2014, £12,000.
Only pensions actually in payment count towards the minimum income requirement for flexible drawdown. To qualify, the pension must be guaranteed for life and, in general, not be one that can reduce from one year to the next.
The member can count towards the minimum income requirement the amounts of the following broad types of pension that they actually receive:
- state pension
- scheme pensions
- dependants’ scheme pensions, and
- lifetime annuities, and
- dependants’ annuities.
The full details of what types of pension count towards the minimum income requirement are as follows:
- A scheme pension or dependants’ scheme pension paid as an annuity
-
Where a scheme pension or dependants’ scheme pension is paid from a registered pension scheme and the pension is provided from an annuity policy, the pension counts towards the minimum income requirement even if the pension scheme has fewer than 20 people getting a pension.
- A scheme pension or dependants’ scheme pension from a registered pension scheme which is not paid as an annuity and the scheme has 20 or more people receiving a pension. (Guidance on what a scheme pension is can be found at PTM062300. Note: all pensions paid from a defined benefits (which includes final salary) part of a registered pension scheme should be a scheme pension).
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