1. January 2012 John Dunn Pre 6 April 2012 pension planning For FinancialAdviser use only

2. Contents Pension planning considerationsCase studySummary 3. Pension planning considerations Question In terms of pension planning between now and the end of the tax year what issues impact on the level of pension saving undertaken by an individual? 4. Pension planning considerations

• Affordability

• • In specie contributions?

• Tax relief

• Annual allowance (AA)

• • Carry forward of unused AA

• • PIP manipulation

• Lifetime allowance headroom

• • Reduction in SLA (1.5m from 6 April 2012)

• • Fixed protection?

5. Case study Background Colin turns 61 on 1 February 2012 and is planning to retire on his 62nd birthday.He is currently in receipt of a pension that commenced on 1 July 2006 from a final salary scheme.In addition to this he has uncrystallised rights under a SIPP currently valued at 900,000 and there is finance available to continue funding through the SIPP.Colin does not enjoy either enhanced or primary protection and is pursuing a lifestyling (LS) investment strategy.In light of the recent publicity on pension changes he has approached you, an IFA, seeking retirement planning advice. 6. Case study (considerations)

• Scope for future pension funding?

• • Impact of 50,000 AA

• • % of SLA remaining

• SLA used by final salary benefits

• Reduction in SLA

• • 1.5m from 6 April 2012

• • Protection (access to 1.8m SLA)?

• Colins income requirements from age 62

7. Case study (previous BCE)

• Benefits taken 1 July 2006

• • PCLS 150,000, scheme pension (initial level) = 22,500 pa

• • Amount crystallised = 150,000 + (20 x 22,500) = 600,000

• • 60% of SLA remaining (600,000/1.5m = 40%)

• No protection

• • 60% of 1.5m = 900,000

• Protection

• • 60% of 1.8m = 1,080,000

8. Case study (recommendation)

• Colin opts for protection

• • At retirement SLA = 1.8m

• • No pension funding post 5 April 2012

• Colin contributes to SIPP before 6 April 2012

• • SLA headroom 180,000

• • LS investment strategy & 1 year term = low investment return

• • Level of contribution?

• SIPP and income options

• • Flexible drawdown?

9. Case study (level of contribution?) Colins SIPP contribution history is set out below.The SIPP consists of one arrangement and the PIP is the tax year.What is the maximum contribution that can be paid before 6 April 2012 without incurring an AA charge? Therefore for the 2011/12 PIP 90,000 can be paid Ending the 2011/12 PIP enables a further 50,000 to be paid in the 2011/12 tax year, 140,000 in total!If notification is done on 1 February 2012 the earliest end date for the 2011/12 PIP is 1 February 2012. Nil 60,000 08/09 20,000 30,000 10/11 20,000 30,000 09/10 Unused AA PIA PIP 10. Case study (contributions & tax relief)

• Colins status?

• • Employed or self-employed or both

• Individual contributions

• • Level of relevant UK earnings

• • Tax relief at marginal rate

• • Income (100,000 - 114,950) 60% tax relief!

• Employer contributions

• • Wholly and exclusively

• • Salary sacrifice (Eee & Eer NIC saving)

11. Summary

• Pre 6 April 2012 pension planning

• • Affordability

• • Tax relief

• • Annual allowance

• • Reduction in SLA from 6 April 2012

• Case study

• • Fixed protection

• • Carry forward of unused AA & PIP manipulation

• • Tax relief issues

• • Income options

12. DISCLAIMER This report has been prepared by James Hay Partnership.The information included in this presentation has been obtained from sources considered reliable.Although reasonable care has been taken to ensure that such information is neither uncertain nor incorrect at the time of publication, it should not be considered as totally accurate or complete.Under no circumstances does the information or the analyses it may contain guarantee future earnings on or returns from investments. Before taking any investment decision, the recipient should have an appropriate understanding of the possible risks entailed in the contracting of the service(s) and/or product(s) contained in the presentation, bearing in mind his/her personal and financial circumstances. If such risks are not appropriately understood, or if any doubts exist, we recommend that the recipient should abstain from contracting such product(s) and/or service(s). James Hay Partnership expressly excludes all liability in respect of errors or omissions in this information. James Hay Partnership or the affiliates of IFG Group, their directors or employees, may at any time hold a position or a direct or indirect interest in securities, financial instruments and issuing institutions that may be mentioned in this document, where applicable. This report may not be used, reproduced, distributed or published by any recipient hereof it without the express consent of James Hay Partnership or IFG Group.