What is Alternatively Secured Pension?

ASP income is based on the GAD tables, like Drawdown, however the minimum income is set at 55% of GAD and the maximum at 90% of GAD. GAD is based on a single life level annuity. For ASP, the 75 age attained will always be the level used.

Should you die whilst in ASP, your remaining fund can pass to your spouse, civil partner or dependant at no charge. If you do not have a spouse, civil partner or dependant, you can leave your remaining fund to your estate or a registered charity. Any benefit paid to a registered charity will be tax-free, however any other transfer of your fund (other than to a spouse, civil partner or dependant) can have a levied tax charge of up to 82%.

The Budget in June 2010 abolished the Age 75 rule and as such the minimum and maximum income limits and tax charges between age 75 and age 77.  This area is under discussion for full implementation in April 2011 and information is constantly being updated.  It is therefore essential that advice is received on this area.  Please contact us to discuss your options further.

ASP was originally introduced for those with religious beliefs that prevented them from partaking in purchasing an annuity due to the benefit of mortality cross-subsidy. Anyone however can take out an ASP plan. The Government therefore introduced a minimum income level and taxation requirements making it much less tax-efficient for estate planning.

Significant care is required when selecting ASP. This required ongoing advice in line with changes in future legislation, market movements and your requirements.

To arrange a meeting or to discuss your options further, call us now on our FREE helpline 0808 1787 335.