Benefits/Drawbacks of taking Tax-Free Cash when it's not needed
arongunningham
Member
Has anyone had any experience or read articles on retirees passing age 75 having not taken PCLS.
We have a client who doesn't need their pension at all, but I wonder if there's merit to drawing the PCLS before he dies? Potentially, for example, he could gift the sum if 7 years longevity is predicted.
Comments
Immediate thoughts:
Thanks.
I think the main reason to draw the TFC would be to pay to the beneficiary (his children) now. The main 'condition' for that to be advised is whether there is sufficient coverage for LTC ... which in his case there should be.
The only reason I can see for advising someone to take the TFC from a plan where there is no need to drawdown income is if the retiree wants to make an immediate gift to a family member and cannot fund the gift from other assets. Taking money out of a pension will have an immediate IHT effect that would not be the case if the retiree died and passed it to beneficiary.
Also, assuming there are no Lifetime allowance issues (and potential charges), I believe you can take TFC post age 75.