Illustrative examples · Advice required in all cases
Client Case Studies
Five illustrative planning examples showing how the FPA addresses different client situations. Click any case to expand. All figures are illustrative. Personalised illustrations available on request.
Note on charges: The FPA carries an establishment fee and annual management charge. Advice fees are payable in addition to product charges. Your adviser will provide exact details of all fees applicable to your client's specific situation on request.
What is a DC (Defined Contribution) pension? A defined contribution pension — such as a SIPP, personal pension or workplace money purchase scheme — is one where the fund value depends on contributions paid in and investment growth. DC pensions are the type affected by Finance Act 2026. If unsure which type your client holds, check with their pension provider. (Defined benefit / final salary schemes are not affected by this legislation.)
FPA · Over 75 · Urgent
Margaret, Age 77
Widowed · £900,000 SIPP · Three adult children
£603,000
max tax saved after 2 yrs
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Age & status77, widowed — no spousal exemption
Pension fund£900,000 SIPP
BeneficiariesThree adult children, ages 47–53
ProblemFull 67% double tax charge on all £900k from April 2027
Without Planning — From April 2027
IHT @ 40%−£360,000
Income tax @ 45% on £540k−£243,000
Net to children (33p in the pound)£297,000
With FPA
Death within 2 yrs — income tax eliminated immediately£243,000 saved from day one
Death after 2 yrs — 100% BPR + no income taxTotal tax = £0
Net to children (post 2 yrs)Up to £900,000
Establishment fee £10,000 · AMC £3,200 (2 yrs) · Pref Share ~£750~£13,950
Adviser fee (illustrative)~£12,500
Net to children after all charges (post 2 yrs)~£873,550
Margaret starts the BPR clock before April 2027. Even if she dies before the 2-year mark, her children save the entire income tax charge — £243,000 — immediately. Estate administration simplified: no HMRC pension IHT reporting, no executor personal liability.
FPA · Blended Family
David & Susan, 68 & 65
Married · £750,000 SIPP · Separate children each
£473,000
potential saving post 2 yrs
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AgesDavid 68, Susan 65
David's pension£750,000 SIPP
ConcernEach wants pension to pass to their own children only
RiskConventional nomination gives trustee discretion — not certainty
With FPA
Pref Share passes to David's children via will — testamentary certaintyNo trustee discretion
No IHT 'double dip' through Susan's estateClean separation
Income tax saving within 2 yrs~£338,000
Full saving after 2 yrs (BPR)~£473,000
Establishment fee £10,000 · AMC £3,200 (2 yrs) · Pref Share ~£750~£13,950
Adviser fee (illustrative)~£12,500
Net fund to children after all charges (post 2 yrs)~£723,550
The Preference Share replaces the pension nomination with testamentary control. David specifies in his will exactly who benefits and in what proportions. Surplus FPA income can be gifted under Normal Expenditure Out of Income for further immediate IHT relief.
FPA · Start Clock Now
Richard, Age 61
Married · £1,200,000 SIPP · No income needed yet
~£600k
tax at stake on £1.2m pension
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Age61, married, two adult children
Pension£1,200,000 SIPP — TFC not yet taken
Income now£80k pa consulting — no pension income needed
ObjectiveProtect pension for children; start BPR clock before April 2027
The Plan
£931,250 → FPA now (TFC taken separately)BPR clock starts at 61
Income set to zero — assets grow tax-free in the CellTax-free roll-up
BPR qualifies at age 63 — long before April 2027Full protection secured
At retirement: switch on flexible FPA incomeMarginal rate optimised year-by-year
Establishment fee £10,000 · AMC £3,200 (2 yrs) · Pref Share ~£750~£13,950
Adviser fee (illustrative)~£12,500
FPA opening fund after all charges~£904,800
Richard starts the BPR clock 16 years before his likely death, and 2 years before April 2027. Assets grow tax-free exactly as in any pension or ISA. At retirement, the FPA's flexible drawdown lets him manage his marginal rate each year — with any surplus gifted under Normal Expenditure Out of Income.
FPA · Executor Risk
Christine, Age 73
Divorced · £600,000 SIPP · Blended family
£335,000+
potential saving after 2 yrs
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Age73, divorced, unmarried partner
Pension£600,000 SIPP
Beneficiaries2 biological children + 1 stepchild + partner
Executor riskEldest child personally liable for £240,000 IHT within 6 months — before receiving anything
With FPA
Pref Share via will — no trustee discretion, legally certainFull testamentary control
Executor personal liability for pension IHTEliminated entirely
Income tax saving — from day one~£162,000 immediately
After 2 yrs — 100% BPRNo IHT
Establishment fee £10,000 · AMC £3,200 (2 yrs) · Pref Share ~£750~£13,950
Adviser fee (illustrative)~£12,500
Net to beneficiaries after all charges (post 2 yrs)~£573,550
Christine can specify conditional provisions: "To children if BPR; to partner if not." This handles both outcomes without prejudging which applies at death. The executor's personal liability — one of the most dangerous provisions in Finance Act 2026 — is eliminated entirely.
FPA · Full Solution
Alan, Age 73
Married · £1,000,000 pension fund · Full double tax charge scenario
£502,500
IHT + income tax saved after 2 yrs
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AgesAlan 73, Helen (wife) 70
Alan's pension£1,000,000 SIPP — TFC not yet taken
Income need£40,000 pa from pension
ObjectivePension to pass to Alan's children (prior marriage) — not into Helen's estate
Without Planning (over 75, no spousal on children's share)
£750k pension · IHT @ 40%−£300,000
Income tax on residual @ 45%−£202,500
Total tax on £750k pension£502,500
With FPA — after 2 years
£750k → FPA · Alan draws £40k pa income (PAYE)Drawdown-equivalent
Pref Share to Alan's children via willTestamentary control
IHT — 100% BPR after 2 years£0
Income tax on death via Pref Share£0
Total saved on death after 2 years£502,500
Establishment fee £10,000 · AMC £3,200 (2 yrs) · Pref Share ~£750~£13,950
Adviser fee (illustrative)~£12,500
Net benefit to children vs no planning (post charges)~£476,050
The FPA gives Alan drawdown-equivalent income while completely separating the pension residual from Helen's estate. His children receive the Preference Share free of all tax via his will — no trustee discretion, no HMRC pension IHT reporting, no executor liability.
For professional adviser use only. Not for client distribution. All case studies are illustrative only. Actual outcomes depend on investment performance, longevity, legislation and BPR outcomes. Individual advice required. Contact: peter.rose@aetas-wealth.com
Illustrative · £500k fund · over 75 · no investment growth assumed
Costs & Benefits — The Numbers
Three scenarios on a £500,000 residual pension fund. All charges included: 2% establishment (capped £10,000), 1% AMC (capped £1,600 pa), and a £12,500 adviser fee. Figures are illustrative — personalised illustrations available.
Scenario A
Death within 2 years — Spousal Exemption
Without FPA
Pension fund£500,000
IHT — spousal exemption£0
Income tax @ 45%−£225,000
Net to spouse£275,000
With FPA · Pref Share
All charges−£25,700
IHT — spousal exemption£0
Income tax via Pref Share£0
Net to beneficiaries£475,900Better off by £200,900
Scenario B
Death within 2 years — No Spousal Exemption
Without FPA
Pension fund£500,000
IHT @ 40%−£200,000
Income tax @ 45% on £300k−£135,000
Net to children£165,000 (33%)
With FPA · Pref Share
All charges−£25,700
IHT @ 40% (BPR not yet)−£190,360
Income tax via Pref Share£0
Net to beneficiaries£284,580Better off by £119,580
Scenario C
Survives 2 years — 100% BPR claimed
Without FPA
Pension fund£500,000
IHT @ 40%−£200,000
Income tax @ 45% on £300k−£135,000
Net to children£165,000 (33%)
With FPA · 100% BPR + Pref Share
All charges−£27,300
IHT — 100% BPR (0 failures to date)£0
Income tax via Pref Share£0
Net to beneficiaries£472,700Better off by £307,700
Cost Comparison
FPA vs Life Assurance
The conventional alternative is whole-of-life or term assurance written in trust. Indicative premiums to provide a comparable death benefit on a £500,000 pension:
| Option | Annual cost | Gross (40% taxpayer) | Over 2 years gross | Income tax benefit? |
|---|---|---|---|---|
| Term assurance to 90 | ~£7,000 pa | ~£11,700 pa | ~£23,400 | No |
| Whole of life | ~£13,500 pa | ~£22,500 pa | ~£45,000 | No |
| FPA (all charges over 2 yrs) | — | ~£27,300 total | £27,300 | Yes — from day one |
Key point: Life assurance addresses only the IHT gap — it does nothing for the income tax charge on death benefits. The FPA eliminates income tax from day one, then IHT via BPR after 2 years, for a single transparent charge. The two are not equivalent alternatives.
Action Plan
Next Steps for Advisers
01
Identify Priority Clients
Flag all clients over 75 with pension fund balances first. Then 55–75 with no spousal exemption or children as intended beneficiaries.
02
Request Illustration
Contact Aetas Wealth for a personalised costs/benefits analysis for each client's specific fund size, age and family situation.
03
Consider Tax Opinion
Fusion Partners (~£1,500 + VAT) provide independent third-party tax opinion on BPR qualification for clients wanting additional comfort.
04
Transfer via Origo
Origo is the secure electronic transfer system used by all major pension providers. In-specie transfers permitted. Allow adequate time before April 2027. Over-75 clients: act now — every month of delay is a month off the BPR clock.
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Peter Rose APFS
Chartered Financial Planner
Chartered Financial Planner
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Book nowFor professional adviser use only. Not for client distribution. Prepared by Aetas Wealth, a trading style of Insight Financial Associates Ltd, authorised and regulated by the FCA (No. 458421). Company No. 05054886. Registered office: Insight House, 7a Alkmaar Way, Norwich International Business Park, Norwich NR6 6BF.
The specialist annuity provider is FCA-authorised and dual-regulated by the Gibraltar Financial Services Commission. All products are 'protected contracts of insurance' under FSCS — 100% policyholder protection, no cap. BPR qualifying conditions confirmed by Threesixty Services LLP (Luke Tribe, Research Manager) per s105(1)(bb) IHTA 1984. Independent tax advice: Fusion Partners (~£1,500 + VAT). All figures illustrative as at April 2026. Individual financial advice required. Contact: peter.rose@aetas-wealth.com