![]() Gilt yields are published daily in the Financial Times. If gilt yields fall to below 0% then you should calculate the basis amount using the gilt yield figure of 0%. There are two tables – one for those aged 23 or over and one for those under 23. The ‘Extended yield drawdown tables for use from 1 July 2017’ should be used for all calculations done on or after that date. The GAD tables and instructions can be found here (Opens new window). The basis amount needs to be worked out first, using the applicable gilt yield and the individual’s age. The limit is calculated using the drawdown tables provided by the GAD. There is no minimum income limit so people can have funds invested in capped drawdown without drawing an income. The basis amount is broadly equivalent to a single life, level, nil guarantee annuity that could be bought on the open market with the drawdown pension fund. The maximum income limit for capped drawdown is 150% of the basis amount. ![]() You can find out more about the MPAA in our separate Money Purchase Annual Allowance FAQs. They will retain the standard annual allowance unless they trigger the MPAA as a member of a pension scheme in their own right, for example, taking an UFPLS from their own pension savings. The MPAA won’t apply to a dependant who converts their pre-6 April 2015 dependant's capped drawdown arrangement to dependant's flexi-access drawdown on or after 6 April 2015. However, if they convert their capped drawdown arrangement to flexi-access drawdown on or after 6 April 2015 by notification to the scheme administrator and the MPAA hasn’t already been triggered, it will only be triggered when the first income payment is taken from the flexi-access drawdown arrangement. If someone converts their capped drawdown arrangement to flexi-access drawdown on or after 6 April 2015 by taking income above the maximum GAD limit, this will trigger the money purchase annual allowance (MPAA) immediately. If someone remains in capped drawdown and does not flexibly access any pension benefits elsewhere (for example, by taking an uncrystallised funds pension lump sum (UFPLS) or by taking income from flexi-access drawdown), then the standard annual allowance will apply. Further information can be found in our Annual allowance FAQs. This means that the member would not be subject to the money purchase annual allowance (‘MPAA’) provisions (unless they had flexibly accessed pension rights under a different arrangement). The main advantage of remaining under the capped drawdown rules is that taking income within the GAD limit from a capped drawdown arrangement does not count as having flexibly accessed pension rights. The recalculation does not change the duration of the review period, and the arrangement will continue under the capped drawdown rules. If it is not higher, it will apply from the beginning of the next pension year. ![]() ![]() The new maximum will apply immediately if it is higher. When topping up a capped drawdown arrangement, the additional designation will cause the maximum income available, calculated at 150% of the GAD rate, to be reset for the remainder of the review period. ![]() Yes, provided the additional designation is made to their existing capped drawdown arrangement rather than creating a new drawdown arrangement under the scheme. ![]()
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