Case Study

Drawing Pension Income

Portrait of Mature Man

Colin (66) lives in Washington, having recently sold his US based business and retired. He contacted Florin Pensions to discuss his UK defined contribution (DC) pension with his former UK employer.

Florin Pensions went through a detailed fact finding and pension review process with Colin. During that time, it was confirmed that Colin wanted to draw his UK 25% pension commencement lump sum (PCLS) now to act as a bridge before accessing his US based retirement assets. After drawing his PCLS, he wanted to leave the remainder of his UK pension invested without drawing further benefits for at least three years. Colin confirmed that he already had a US accountant to advise on the taking of his UK PCLS and future pension income. However, if Colin had needed recommendations for US/UK accountants familiar with UK pensions, we would have been able to provide these for his consideration.

Florin Pensions reviewed his existing DC pension and confirmed that the only options offered by the plan were to take his PCLS and use the remaining funds to purchase a UK Annuity or cash-out his UK pension in full. These options did not meet Colin’s retirement objectives as he wanted to keep his UK pension invested for the medium – long term after drawing his PCLS.

Florin Pensions advised on the transfer of his DC pension plan to a new fully online UK personal pension with a provider that works with US residents and offers flexi-access drawdown. After Colin’s DC pension transfer was complete, we assisted him with taking his 25% PCLS from his new UK pension. His remaining UK pension funds were then invested in a diversified portfolio managed by a UK fund manager in line with his risk profile. So that Colin could, in the future, draw his UK pension gross of UK income tax, we also assisted Colin with the process of obtaining a UK non-tax code for his future UK pension income draws.