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FinCalc launches lifetime allowance tool within cashflow modeller 

16 December 2020

Financial planning software provider FinCalc has launched a new lifetime allowance tool within its Cashflow Modeller. 

Pension savers who exceed the current lifetime allowance of £1.073 million risk a 55% tax charge if the amount is withdrawn as a cash lump sum.

Gavin Shears, senior product consultant, FinCalc, says: “With a lifetime cashflow modeller, it is crucial that LTA is handled correctly and applied within a client’s current position to illustrate when an expected standard of living may have to be adjusted to cope with this potential tax charge of 55%.”

Shears said having the functionality to look at ‘what if’ clients crystallised pensions in a different order or by a different withdrawal style would answer some of the biggest questions facing advisers.

The Cashflow modeller tool now includes all HM Revenue & Customs protection types as well as tax free cash protection and an LTA recoup factor for DB schemes.

It also allows advisers to enter historical BCEs to calculate revalued crystallisations for primary and enhanced protection without tax-free cash protection, and use crystallised or uncrystallised funds for withdrawals from DC funds.

Shears added: “Including LTA within a lifetime cashflow modeller will save so much time for advisers and follows on from the inclusion of full income tax calculations. The impact of any LTA tax charge is clearly detailed in the results output and is extremely powerful for advisers when helping clients move from pensions accumulation to decumulation.”

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