You must provide information on flexible access, pension savings, lifetime allowance and charge, and lump sum death benefits.
Flexible access statement
When a member flexibly accesses their pension savings (a relevant event) you must give them a flexible access statement. The relevant events are:
- a qualifying payment made from:
- a flexi-access drawdown fund created from uncrystallised funds designated into drawdown
- funds designated into a flexi-access drawdown fund as a result of a transfer
- a payment made from a capped drawdown pension fund that is more than the annual capped drawdown limit and so converts the fund into flexi-access drawdown
- the payment of:
- an uncrystallised funds pension lump sum
- a stand-alone lump sum on or after 6 April 2015 from a defined contributions arrangement to a member who has primary protection with protected lump sums of more than £375,000
- the first payment of:
- an annuity under a flexible lifetime annuity contract
- a scheme pension under a defined contributions arrangement to which the member became entitled on or after 6 April 2015 and at that time less than 11 other individuals had become entitled to the payment of a scheme pension or dependants’ scheme pension under the same scheme - does not apply if the scheme is a deferred annuity contract
You don’t need to give a flexible access statement to the member if:
- you’ve already given them a flexible access statement in relation to an earlier relevant event under the scheme
- the member or the scheme administrator of another pension scheme has told you that they have previously flexibly accessed their pension rights
Information to give in the flexible access statement
You must include that:
- the member has flexibly accessed their pension savings and the date of the relevant event
- if in any tax year the member’s total pension inputs into money purchase arrangements and certain hybrid arrangements is more than £10,000:
- they will be liable to an annual allowance charge on the excess amount over £10,000
- their annual allowance for pension inputs under other types of arrangements will be reduced by £10,000
- the member has a duty to pass on information to other pension schemes - describe the circumstances in which they must pass on that information, what information has to be passed on and the relevant time limits
When you must provide the flexible access statement
You must give the flexible access statement to the member within 31 days of the date of the relevant event. If you don’t give the information on time or it’s incorrect you may be charged a penalty.
Pension savings statement
This is a statement of the amount of pension saving in the pension scheme for a tax year. If a member has more than one pension pot under the same scheme the statement must cover all of their pension pots.
You must give the member a pension savings statement if:
- their savings in a pension input period are more than the annual allowance
- you have reason to believe they have flexibly accessed their pension savings and their money purchase input amounts under the scheme exceeded £10,000
Even if you don’t have to give a pension saving statement a member can still ask you to give them this information.
Member has flexibly accessed their pension savings
If you have reason to believe the member has flexibly accessed their pension savings and their money purchase input amounts under the scheme exceeded £10,000 you must give them a money purchase pension savings statement. You can find out what information to include in the money purchase pension savings statement in the Pensions Tax Manual.
Member has not flexibly accessed their pension savings
If the member’s savings in a pension input period are more than the annual allowance, but they have not flexibly accessed their pension savings you must give them a standard pension savings statement.
The standard pension savings statement must contain:
- the total amount of the member’s pension inputs made to the scheme in the ‘pension input period’ ending in the tax year
- the amount of the annual allowance for that tax year
- the total amount of the member’s pension inputs made to the scheme for each of the pension input periods ending in the previous 3 tax years
- the amount of the annual allowance for the previous 3 tax years
If the scheme has an input period that starts before 14 October 2010 and ends after 5 April 2011 you may need to split the pension input period.
When you must provide the pension savings statement
You must automatically give a pension savings statement to the member if the amount of their pension inputs in the scheme is more than the annual allowance. You must do this by 6 October following the end of the tax year.
If you don’t have to automatically send a statement you must give the member the information they’ve requested within 3 months. If they ask for the information before 6 July following the end of the tax year you have until 6 October to give them this information.
Sometimes you won’t be able to give the pension statement within these deadlines because you’re waiting for information from another person - such as from a scheme employer. In this case you have 3 months to send the statement after you get the information.
If you don’t provide the information on time or it’s incorrect you may be charged a penalty.
You can find technical guidance on pension statements in the Pensions Tax Manual.
Lifetime allowance statement
When you’ve carried out this check you must tell the member what percentage of the lifetime allowance they’ve used up by the BCEs occurring in the scheme.
When you must provide the lifetime allowance statement
If their pension started to be paid after 6 April 2006 and you’re paying a pension to the member you must provide this information at least once every tax year.
If you’re not paying a pension - for example because the scheme only paid a lump sum - you must provide this information within 3 months of the BCE.
You can stop providing an annual lifetime allowance statement in the following circumstances:
- the member is 75 or older for the whole of the tax year - so the last statement you issue is for the tax year when they reach age 75
- the member’s pension pot has been transferred to another pension scheme - the receiving scheme will issue annual lifetime allowance statements
- you’ve given pension funds to an insurance company to pay the member’s pension - you tell the insurer the percentage of allowance used for those funds and they issue the statement to the member
- from 6 April 2015, where all funds held in respect of a member under the scheme have been extinguished and no further pension or lump sum payments can be made
You can find detailed technical guidance on lifetime allowance statements in the Pensions Tax Manual.
When a lifetime allowance charge is due
The member and scheme administrator are jointly liable to pay the lifetime allowance charge unless the event causing the charge is the member’s death. In most cases the scheme administrator must report the charge and pay the tax due using the Accounting for Tax (AFT) Return. You have 3 months to tell the member:
- how much of their pension savings are subject to the lifetime allowance charge
- how you’ve calculated the tax and the amount due
- if you’ve paid or intend to pay the tax
The member needs this information to complete their Self Assessment tax return telling HM Revenue and Customs (HMRC) how much tax was payable and how much their scheme paid.
You’re paying lump sum death benefits
If your scheme is making a payment because the member has died the scheme doesn’t pay the lifetime allowance charge.
If your scheme has paid a lump sum death benefit that uses up the member’s lifetime allowance you must tell the member’s personal representative the:
- percentage of the lifetime allowance used up by the lump sum payment
- date of payment
You have 3 months to give this information to them.
If the member’s personal representative asks for information on any other benefits the scheme has paid that used up the member’s lifetime allowance you must give them this information within 2 months of their request.
You can find detailed technical guidance on information requirements where the scheme member has died in the Pensions Tax Manual.