Pension benefits from a defined contributions pension scheme (from 6 April 2015)

Produced by in association with John Hayward

Employment Tax

Guidance

STOP PRESS: This guidance note may be affected by the changes to the taxation of pensions made by FA 2024, Sch 9 from 6 April 2024 onwards. The commentary below covers the rules that apply prior to that date. Before continuing your research, see the Abolition of the lifetime allowance guidance note.

Introduction

Members of an occupational defined contribution scheme may take pension benefits in the form of a scheme pension, a lifetime annuity or in the form of income drawdown.

Scheme pension

The pension is provided from the registered pension scheme or from an insurance company selected by the scheme administrator. A scheme pension may be guaranteed for a certain term not exceeding 10 years. So if the member dies before that term has ended, the scheme pension will continue to be paid regardless of the end of the guarantee period, but to another person or to the deceased’s estate. The 10-year maximum term-certain period runs from the date the member first becomes entitled to

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