Scheme Pensions and the Minimum Income Requirement

On 31 March 2011 Her Majesty’s Revenue and Customs published ‘Pensions: Draft Guidance on Changes to the Benefits Rules under Registered Pension Schemes’. In this document it explains that a pension paid as scheme pension from a registered pension scheme only counts towards the minimum income requirement if the scheme has 20 or more people receiving a pension from it.

Rowanmoor Pensions’ Small Self-Administered Scheme (SSAS), Self-Invested Personal Pension (SIPP) and Family Pension Trust (Family SIPP) offer the option of taking retirement benefits as scheme pension, income withdrawal via capped drawdown, or flexible drawdown when the £20,000 minimum income requirement has been satisfied, and annuity purchase.

The Government’s 31 March announcement means that scheme pensions paid by a Rowanmoor Pensions SSAS, SIPP or Family Pension Trust will not count towards the minimum income requirement.

This unanticipated, late announcement, affects the SSAS Brochure and SIPP and Family Pension Trust Key Features documents, which can be found in our library These brochures were sent to print on 24 March, as it was anticipated that if there were to be any additional changes affecting pensions legislation from 6 April 2011, these would have been announced in the Budget on 23 March 2011.

Draft legislation covering this point, also published on 31 March 2011, is to form part of the Finance Act 2004 as amended by the Finance Bill 2011, which is due to receive Royal Assent in the Summer of 2011. Please note therefore that until Royal Assent is given the draft legislation may be subject to change.

PDF versions of our brochures have been updated with an addendum, which explains this change.

Should you require an explanation of any aspect of the information please contact us or your financial adviser.