Full fund withdrawal tax free due to terminal illness

Afternoon all,

Just wondering if anyone has had to facilitate a full fund withdrawal tax free due to terminal illness and what the requirements of the providers were in this circumstance?

Comments

  • Some providers have forms that they want completed by the clients doctor or consultant to confirm that they are terminally ill.

  • I'd just be mindful of whether there are other better solutions to meeting client need. May be better from IHT point of view (depending on numbers) to keep the pension despite the tax free (in life) payment... The definitions providers use will vary slightly re their rules/definitions, so have a chat with them to find out what they need to know...

    Chartered Financial Planner FPFS MCSI APP
    Head of Technical at EQ Investors

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  • I looked into this a couple of months ago for a client on the Old Mutual platform. Old Mutual have a form to complete and on receipt they will then write to the client's GP:

    "When we have the completed forms, we will write to the client’s General Practitioner (or other registered medical practitioner). We will tell the client when we do this so that they have the opportunity to see their report before it is sent back to us if the client wishes to exercise their rights under the Access to Medical Report Acts. Once we have that report, we can make a decision."

    One important thing to remember is that this type of payment is only available for uncrystallised funds - so funds that are already in drawdown cannot be accessed in this way.

  • Morning all,

    thanks for the replies, i have spoken to some providers, Old Mutual ore the only ones who appear to have a robust process, whereas AJ Bell have a quick process for the over 55's which does not involve the need to refer to a GP. Thank you all for coming back to me.

  • PTM063400 provides the rules for this, which includes the requirement that the scheme administrator has received written evidence from a registered medical practitioner confirming that the member is expected to live for less than one year. SO, AJ Bell may not need to write to the GP but they DO need to get written confirmation from someone medical, typically client's consultant rather than GP, otherwise this is an unauthorised payment.

    I suspect that all providers actually have a robust process but if you are speaking to the 'front desk' teams they are unlikely to know - the standard of knowledge with 'front desk' support staff across vast majority of providers is, imo, falling.

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