The world of pensions is constantly evolving with new products, government legislation and external factors all shaping the way we view our strategy towards saving for retirement. F or savers who may have already accumulated considerable funds and who may be looking for a cost- effective, flexible pension arrangement to create better planning options in order to retain wealth for the family, one intelligent alternative is a pension ‘wrapper’ known as a amily Pension Trust. Some of the key features to be found in a Family Pension Trust are: • The structure, a hybrid of a Self-Invested Pension Plan (or SIPP) allows for wider investment opportunities than other pension schemes;
• Investments can be made by some individual members or by groups of members joining together;
a Family Pension Trust (Family SIPP) is a cross between a Small Self-Administered Scheme (SSaS) and a Self-Invested Personal Pension (SIPP). Each member within the Trust retains control of his or her investments under the scheme and members may join together to pool some, or all of their pension fund within one or more investment funds, to access new investment opportunities. Currently many people limit their pension contributions each year in order to try and avoid exceeding the Lifetime Pension Allowance since any pension savings over the current limit could be taxed at 55% (subject to the type of pension they have). By consolidating their funds, the group could in aggregate potentially hold assets in excess of the lifetime allowances of individual members, (but the individual Lifetime Allowances still apply). The unique features of the Family Pension Trust create significant wealth planning opportunities and there are a wide range of investment options to invest in, such as stocks and shares, funds, bonds and commercial property. another benefit can be that the value of the Family Pension Trust is not included in the estate value at the time of death, which means that full control remains with the surviving members of the scheme. Furthermore, the probate process is avoided and funds pass directly to those they were intended for. No other investment proposition allows this level of flexibility at the current time.
• Diverse approaches to risk can be catered for;
• Flexible benefit options within the scheme allow retirement income to be phased; • Multiple common investment funds can be set up, for example to purchase commercial property, which can then be held within the fund; • Each scheme will have a dedicated administrator, making it a bespoke service; With recent changes in legislation, and the rising need and desire for people to provide greater sums for their children, grandchildren or other possible future successors, this is a great option for people wishing to pass their wealth on to future generations, and which sits outside their estates. The added bonus of schemes like this is that the individual would retain full control of the plan during their lifetime. Scrutton Bland’s financial advisers provide independent advice from across the whole market, and can guide you through the minefield of pension providers to find the best option for you. Contact Grant Buchanan at 01206 838400 or grant.buchanan@ scruttonbland.co.uk or visit our website www.scruttonblandifa.co.uk • The scheme can cost less than multiple bespoke SIPPs.
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