This article is a continuation of Income Analysis - Charges
The system allows you to choose between three income strategies, PCLS, UFPLS or Phased Drawdown. If you select PCLS the system will take out the percentage of PCLS specified and remove it from the income calculations.
UFPLS will keep the total plan values invested in the drawdown plan, when income is taken from the drawdown plan 25% of the income withdrawn will be tax free, this will be taken into account when calculating the tax liability.
Phased drawdown allows you to specify the phased period end age, and choose either PCLS or UFPLS for the phased period and remaining term.
Before entering a Phased Period End Age, you will need to add plans that have a Phased Drawdown Investment strategy
Manage Plans
Pull holdings through from the contact record using the Manage Plans button:
Either select one or more existing plans, or Add New Holding Plan(s).
When selecting an existing plan, complete details of the investment strategy.
Select Phased Drawdown
Choose Phased Period Strategy and the Remaining Period Strategy:
If PCLS is selected, enter the PCLS Amount %.
If the client has previously taken some of their tax free cash, enter the amount and select No to the below question:
If the client is taking less than 25% tax free cash and would like to use the remaining in the calculations, select Yes:
In this example, our client is taking 25% tax free cash.
Enter the Plan Details.
When the Growth Rate has been populated, the Projected Value will automatically calculate.
Adviser Fees will pull through from the holding if the area has been populated.
Complete the remaining Provider Product Charges and Save.
If you need to add a new holding, click + Add New Plan within the Manage plans area:
Select Pension Holding or Non-pension Holding
Complete details and Save:
Save
Ensure the plans you would like to see in the results are included:
You can add as many plans as you would like to take into the drawdown scenario. The projected total value of all plans is calculated. If you have chosen a PCLS income strategy then you can specify how much PCLS out of the total you would like to remove. The system defaults to the 25% tax-free amount. However, this can be overwritten up or down to suit your clients’ needs.
The remaining fund value will be the figure used for the drawdown plan ‘initial investment’ when calculating if your income profile is achievable for the duration specified.
Phased Drawdown will be reflected in the Results screen, showing when the Phased Period Ends in the Income Value Graph.
For further information on Income Analysis research, see article Income Analysis - Income Requirements
