New Tables to Determine the Annual Amount when Calculating the Maximum Income Withdrawal from Unsecured Pension Funds

Registered pension schemes may pay a pension to a member or a dependant of a deceased scheme member in a number of forms, including one that is known as 'income withdrawal'. This permits the individual to take an annual income from their pension fund of between 0 per cent and 120 per cent of the 'annual amount' of a comparable lifetime annuity. The Government Actuary's Department (GAD) publishes tables for HM Revenue & Customs that allow schemes to calculate this annual amount. There are separate tables for Men, Women and Children (ie individuals up to age 23).

The tables work through a correlation of the age and gender of the individual with the relevant gilt yields. The adult tables are based on fifteen year gilt yields and the children's table on five year gilt yields. All three tables cover gilt yields from 3 per cent to 8 per cent. The five year gilt yield fell below 3 per cent in January and so a revised Children's table has been produced covering gilt yields down to 2 per cent. The adult tables have also been revised to give consistency with the new Children's table. The new tables, together with instructions on how to use them, are available at GAD Tables.