TTFAC Calculation

ThomasCoughlanSW

Good morning all,

Just comparing TTFAC calulations using M&G's and Quilter's tools and am getting different results.

To keep things simple, if a client (standard LTA) took a 10% BCE with £25,000 TFC and also a serious ill health lump sum of 10% (£100k tax-free) I would expect the LSA / LSDBA on both the standard and TTFAC basis to be:

LSA / LSDBA - £214,620 / £858,480

TTFAC LSA / LSDBA - £143,275 / £948,100.

M&G's tool agrees but Quilter's gives different figures for LSA (£243,275).

I'm pretty sure M&G's is correct but does anyone know how Quilter's arrive at their figures?

Thanks

ThomasCoughlanSW

Sorry had to edit above after publishing comment. The difference seems to be that Quilter do not deduct the tax-free amount of the SIHLS from the LSA on the TTFA basis?

MarkDevlin

@ThomasCoughlanSW I'd like to confirm that the M&G one is the right one, but you've highlighted en error in the tool. I have now fixed this and the new version is on the site now (you may need to clear your cache). Sorry for the inconvenience and confusion.

ThomasCoughlanSW

Thanks Mark, what was the error out of curiosity?

MarkDevlin

The tool was taking the tax free amount of the SIHLS from the LSA.